Not only expense ratio, liquidity and impact cost very important factors for ETFs: Arun Sundaresan

economictimes.indiatimes.com:

Arun Sundaresan, Head-ETF, Nippon Life India Asset Management, says “generally, most of these ETFs anyway tend to be low on expense and they may be comparable but the moot point here is that you should not be guided only by the expense ratio. If the liquidity is poor and if the impact cost is very high, that may defeat the entire purpose of low-cost investing through ETFs.”

ETFs are seeing substantial numbers as far as the performance across the board are concerned, especially the volumes. I really want to understand the trigger behind these significant volume numbers.
Arun Sundaresan: Obviously ETFs and index funds, passive funds as they are called, have been picking up significant traction over a period of time in the mutual fund industry. Already the total assets under management in these types of funds is around Rs 8 lakh crore. Particularly talking about ETFs, the exchange traded funds they have been around for quite some time now. The topic for today's discussion, what we wanted to talk to you about is the liquidity in an ETF, how critical that is when it comes to your investment.

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Obviously, the liquidity gets built up over a period of time. Some well-established ETFs like ours, for example, which have been around since 2001, are quite popular, leading to higher volumes and higher liquidity, which in turn has a lot of direct implications for investors. At the same time, there may be other ETFs in the same category, which may be relatively small and the liquidity