Investing Guide #92: What Are ETFs (Exchange Traded Funds) & How to Invest in Them in India

 

Want to Invest in Stocks + Diversification? ETFs Give You the Best of Both Worlds

ETFs (Exchange Traded Funds) are like mutual funds that you can buy and sell like stocks. They’re perfect for DIY investors.

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📘 What is an ETF?

A fund that tracks an index (like Nifty or Sensex) but trades live on stock exchanges.

• Low-cost
• Transparent
• Flexible
• Tax-efficient

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🔥 Examples of Popular Indian ETFs

• Nippon India Nifty 50 ETF
• ICICI Prudential Nifty Next 50 ETF
• HDFC Gold ETF
• Motilal Oswal Nasdaq 100 ETF

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✅ Pros

• Low expense ratio (<0.3%)
• Instant liquidity
• Can invest with just ₹100
• Good for passive investing

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⚠️ Cons

• Requires Demat account
• Slight learning curve vs mutual funds
• Market timing matters (like stocks)

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✅ Conclusion

ETFs = smart hybrid tool for investing in entire sectors or markets. Great for those who want control without complexity.

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