ETF stocks provide broad diversification with liquidity at a lower cost. You can simply buy or sell an ETF, similar to a stock.
ETF investments give exposure to specific sectors, a basket of stocks, commodities and other relevant products, helping diversify investments in a single transaction.
Exchange Traded Funds are traded directly on stock exchanges, where one can Buy & Sell ETF stocks at any given point of time during market hours — just like regular equity shares.
The expenses involved while investing in ETFs are lower compared to actively managed Mutual Funds, due to passive management and no distributor commissions.
Diversify and reduce risks by investing in Index Exchange Traded Funds. Returns are directly linked to the index it follows (e.g. Nifty 50, Sensex). Ideal for passive investors seeking market-level returns at low cost.
Gold ETFs have proved their worth over physical Gold in terms of safety and convenience. No storage or making charges. Each unit typically represents 1 gram of 99.5% pure gold, traded on the stock exchange.
Bank, Infra, Liquid, and International Exchange Traded Funds are also available. Similar to Index ETFs and Gold ETFs but differ in their underlying composites, allowing targeted sectoral or thematic exposures.
| Feature | ETF | Mutual Fund |
|---|---|---|
| Trading | Traded on stock exchange like shares, anytime during market hours | Bought/sold at end-of-day NAV only |
| Management Style | Mostly Passive (index-tracking) | Active or Passive |
| Expense Ratio | Lower (passive management, no distributor fees) | Higher (especially for active funds) |
| Minimum Investment | Price of 1 unit (as low as ₹10–₹50) | Usually ₹500 or more (SIP) |
| Demat Account | Required | Not required |
| Liquidity | High — can buy/sell anytime on exchange | Moderate — redemption processed at NAV |
| SIP Facility | Not directly available (manual purchase needed) | Available through AMC or distributor |
| Transparency | Portfolio disclosed daily | Portfolio disclosed monthly |
Frequently asked questions about Exchange Traded Funds
The allotment price of an ETF NFO is linked to the prevailing value of the underlying index at the time of allotment. As a result, the exact allotment value cannot be determined beforehand. Investors should update the ETF listing price in their portfolio manually to reflect the correct valuation of their investment.
The portfolio section provides an option to modify the listing price. Investors can enter the actual listing value of the ETF units, which helps display the correct valuation of their holdings.
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