Exchange Traded Funds (ETF)
Exchange Traded Funds (ETFs) are investment funds that trade on stock exchanges like stocks but offer diversification similar to mutual funds. ETF investments track stock market indices such as BSE SENSEX and NIFTY 50. You can buy and sell throughout the trading day and take advantage of intraday price movements. ETFs combine the flexibility of stocks with the diversification of mutual funds for a smart investment choice.
Benefits of ETFs
| Minimise Risk | Cost-Effective | Liquidity | Tax Advantage | Transparency |
|---|---|---|---|---|
| A diversified portfolio of assets reduces the impact of market fluctuations | Low cost and low expense ratio compared to mutual funds | Buy and sell ETFs at any time throughout the exchange’s trading day | ETFs offer better tax efficiency than direct stock investments | Real-time price and performance updates for clarity |
| Affordable | Passive Management | Flexibility | Convenience | Accessibility |
| Trade with minimal investment by purchasing ETF units. | ETFs mirror market indices and do not try to outperform them | Invest in various assets, from stocks and commodities to bonds and more | ETFs can be held in a Demat account for easy management. | ETFs offer easy access to diverse asset classes and global markets. |
How to Invest in ETFs with 5paisa?
-
01
Open a Demat Account with us on our 5paisa web portal or app. -
-
02
Explore ETFs and choose one that aligns with your goals and risk profile. -
-
03
Transfer funds to your account and start buying and selling ETF units.
ETF Related Articles
Inverse ETF
- 5Paisa Research Team
- 11 Jan 2024
Best ETFs in India for Smart Investing
- 5Paisa Research Team
- 21 Nov 2025
Best Gold ETFs in India
- 5Paisa Research Team
- 22 Apr 2025