What are ETFs (Exchange Traded Funds)?
Understand how ETFs offer diversification, simplicity, and low-cost investing.
Understanding ETFs
Difference between ETF and Mutual Fund
ETFs trade like stocks on an exchange throughout the day, while mutual fund units are bought/sold at the end-of-day Net Asset Value (NAV). ETFs are often passively managed (tracking an index) and tend to have lower expense ratios than actively managed mutual funds.
How to Invest in ETFs
You can buy and sell ETFs through a regular stock brokerage account (demat and trading account) just like you would buy shares of a company.
Top Indian ETFs (Nifty, Gold, etc.)
Popular ETFs in India track indices like Nifty 50, Nifty Next 50, or commodities like Gold. Examples include Nifty 50 ETFs, Gold ETFs, and sectoral ETFs.
Benefits for Beginners
ETFs provide instant diversification, are generally low-cost (lower expense ratios), transparent (holdings are disclosed), and easy to trade, making them suitable for beginners.
Simple Investing
ETFs offer a convenient and cost-effective way for investors, especially beginners, to gain exposure to a diversified basket of assets or track a specific market index.