Exchange Traded Funds (ETFs)
Combine the best of mutual funds and stocks with ETFs. Get diversification, low costs, and the flexibility to trade like stocks, all in one investment vehicle.
Index Tracking
Follows indices like Nifty, Sensex
Live Trading
Buy/sell throughout market hours
Low Cost
Lower expense ratios than mutual funds
Diversification
Exposure to entire sectors in one trade
Understanding Exchange Traded Funds
Exchange Traded Funds (ETFs) are investment funds that trade on stock exchanges, similar to stocks. They typically track the performance of a specific index, sector, commodity, or asset class. ETFs combine the diversification benefits of mutual funds with the trading flexibility of stocks.
Unlike mutual funds that are priced once a day after market close, ETFs can be bought and sold throughout the trading day at market prices. They generally have lower expense ratios compared to mutual funds and offer greater tax efficiency due to their unique structure.
Popular ETF Types in India
- •Index ETFs: Track major indices like Nifty 50, Sensex
- •Sector ETFs: Focus on specific industries like banking, IT
- •Gold ETFs: Track gold prices without physical ownership
- •International ETFs: Provide exposure to global markets
- •Bond ETFs: Invest in fixed-income securities
ETFs vs. Mutual Funds vs. Stocks
How to Invest in ETFs
Open a Demat & Trading Account
You need a demat and trading account with DSR Group to buy and sell ETFs on the stock exchange.
Research ETFs
Review different ETFs, their underlying indices or assets, expense ratios, and trading volumes before making a decision.
Place an Order
You can place buy/sell orders for ETFs just like stocks during market hours through our trading platform.
Monitor Performance
Track your ETF investments regularly to ensure they continue to meet your investment objectives.
Rebalance as Needed
Periodically review and adjust your ETF portfolio to maintain your desired asset allocation and risk profile.
Benefits of ETF Investing
Diversification
Gain exposure to a basket of securities with a single trade, reducing single-security risk.
Cost Efficiency
ETFs typically have lower expense ratios compared to mutual funds, maximizing your returns.
Transparency
Holdings are disclosed daily, allowing you to always know what you own.
Liquidity
Trade throughout market hours at real-time prices, unlike mutual funds.
Tax Efficiency
ETFs generally generate fewer capital gains distributions, offering tax advantages.
Flexibility
Implement various strategies like SIPs, lump sum investments, or tactical trading.
Popular ETFs in India
| ETF Name | Type | Tracking | Expense Ratio | 1Y Returns* |
|---|---|---|---|---|
| Nippon India ETF Nifty BeES | Index ETF | Nifty 50 | 0.05% | +18.2% |
| SBI-ETF Sensex | Index ETF | Sensex | 0.07% | +17.5% |
| HDFC Gold ETF | Commodity | Gold | 0.59% | +11.3% |
| Nippon India ETF Nifty Bank BeES | Sector ETF | Nifty Bank | 0.19% | +23.1% |
| Motilal Oswal NASDAQ 100 ETF | International | NASDAQ 100 | 0.54% | +14.9% |
*Past performance is not indicative of future results. Returns as of September 2023.
Our ETF Trading Services
Complete ETF Trading Solutions
- Zero brokerage on ETF investments
- Advanced ETF screener and comparison tools
- Real-time price tracking and alerts
- Expert ETF research and recommendations
- Tax-optimized ETF portfolio strategies
- Automatic SIP facility for ETF investments
- ETF portfolio analytics and performance tracking
Frequently Asked Questions
What is the minimum investment amount for ETFs?
The minimum investment amount for ETFs is the price of one unit of the ETF, which varies based on the current market price. Most ETFs in India trade between ₹20 to ₹4,000 per unit, making them accessible to investors with different budget levels.
How are ETFs taxed in India?
ETFs are taxed based on their underlying assets. Equity ETFs held for more than 12 months are subject to long-term capital gains tax at 10% above ₹1 lakh per year. For holdings less than 12 months, short-term capital gains tax at 15% applies. Gold ETFs are taxed as non-equity funds with different rates.
Can I start a SIP with ETFs?
Yes, you can create a systematic investment plan (SIP) for ETFs through our platform. While traditional ETF trading happens in whole units, our SIP facility allows you to invest a fixed amount regularly, similar to mutual fund SIPs.
How do ETF expense ratios compare to mutual funds?
ETFs typically have lower expense ratios compared to mutual funds, especially actively managed ones. In India, large index ETFs often have expense ratios between 0.05% to 0.20%, while actively managed mutual funds may charge between 1% to 2.5%.
Are ETFs suitable for beginner investors?
Yes, ETFs can be excellent for beginners due to their simplicity, diversification, and lower costs. They provide exposure to entire markets or sectors with a single purchase, removing the need to select individual stocks. However, understanding how to trade them on exchanges is important.
Ready to Start Trading ETFs?
Open a free trading account with DSR Group and access a wide range of ETFs with zero brokerage. Our expert research and advanced tools help you build a diversified portfolio effortlessly.