Exchange-Traded Funds
Low-cost index, gold and sector ETFs for efficient, transparent market exposure — the passive core of a portfolio.
Overview
ETFs give you the whole market in a single trade at a fraction of an active fund's cost. We use index, gold and sector ETFs to build the passive core of your allocation, keeping overall costs down while active funds and managed portfolios do the work of beating the market around it.
At a glance
- Index & gold ETFs
- Low expense ratio
- Intraday liquidity
Key benefits
Index, gold and sector ETFs
Low expense ratios keep more of the return
Intraday liquidity — trade any time markets are open
Transparent, rules-based exposure
Expense ratio
Typically 0.05% – 0.5%
Liquidity
Intraday, on exchange
Minimum
One unit
Needs
A demat account
Types of Exchange-Traded Funds
Equity ETFs
Track an index such as the Nifty 50 or Sensex, giving you the whole market in a single trade at a fraction of an active fund's cost.
Gold ETFs
Each unit is backed by physical gold held by the fund. You get gold exposure without lockers, making charges or purity worries.
Debt ETFs
Hold government securities, PSU bonds or target-maturity baskets. Useful for a predictable, low-cost fixed-income sleeve.
Sector & thematic ETFs
Concentrated exposure to a single sector or theme — banking, IT, consumption. Powerful in the right cycle, punishing in the wrong one.
What to weigh before you invest
Watch the tracking error
An ETF is meant to mirror its index. The gap between the two is tracking error — the smaller and more consistent, the better the fund is doing its job.
Liquidity can be shallow
A thinly-traded ETF has a wide bid-ask spread, and that spread is a real cost. Always use limit orders rather than market orders.
You need a demat account
Unlike a mutual fund, an ETF trades like a share. If you do not want a demat account, an index fund gives you the same exposure.
Passive means passive
An ETF will never beat its index — that is the point. It is the low-cost core, with active funds and managed portfolios doing the outperforming around it.
Who Exchange-Traded Funds suits
If you recognise yourself here, it is worth a conversation — a free review, with no obligation and nothing to sign.
- Investors who want broad market exposure at the lowest possible cost
- Anyone building a passive core to sit under their active holdings
- Investors seeking gold exposure without holding physical metal
- Those comfortable placing trades through a demat account
Got questions? We have answers
What is an ETF?
An Exchange-Traded Fund is a basket of securities that tracks an index and trades on the exchange like a single share. It combines a mutual fund's diversification with the flexibility of buying and selling any time the market is open.
How is an ETF different from an index fund?
Both track an index. An ETF trades on the exchange at a live price and needs a demat account; an index fund is bought from the AMC at the day's closing NAV and does not. ETFs are usually marginally cheaper; index funds are simpler to run a SIP into.
What is tracking error?
The extent to which the ETF's return drifts from the index it is meant to replicate, caused by costs, cash holdings and rebalancing friction. Lower and steadier is better.
Do ETFs carry risk?
Yes. You carry the full market risk of the underlying index — an ETF falls just as hard as the market it tracks. There is also liquidity risk in thinly-traded ETFs, where wide spreads eat into your return.
How are ETFs taxed?
Equity ETFs are taxed like equity: gains over a year are long-term, below that short-term. Gold and debt ETFs follow their own rules, which we walk you through before you invest.
Can I run a SIP into an ETF?
Not natively — an ETF is bought like a share, so there is no AMC-level SIP mandate. Some brokers offer a scheduled recurring buy. If you want a genuine hands-off SIP, an index fund gives you the same exposure with far less friction.
Why does the ETF price differ from its NAV?
The market price is set by supply and demand on the exchange, while the NAV reflects the underlying basket. They can drift apart — trading at a premium or a discount — especially in thinly-traded ETFs or during volatile opens.
Why should I always use a limit order?
Because a market order accepts whatever price is available, and in a shallow ETF that can be well away from fair value. A limit order caps what you pay. This single habit saves more money than most fund selection does.
Are gold ETFs better than physical gold?
For investment, almost always. No making charges, no purity risk, no locker rent, and you can sell any part of it in seconds. Physical gold wins only where you want to wear it or hand it down.
What are the ongoing costs?
The expense ratio, usually 0.05%–0.5% a year — a fraction of an active fund's 1–2%. On top of that you pay brokerage and the bid-ask spread on each trade, so frequent trading quietly erodes the cost advantage.
Should my whole portfolio be ETFs?
For some investors, honestly, yes — a low-cost index core is a perfectly respectable portfolio. For most, we use ETFs as the passive core and let active funds and managed portfolios do the work of trying to beat the market around it.
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