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ETF Investing in India?

Popularly known as ETF, Exchange Traded Funds provide investors with flexibility of a stock market benefits coupled with capital protection. Therefore, ETF funds is fast catching the eye of Indian investors who are constantly on the look-out for lucrative investment options. ETF invests in stocks comprising an index and trade on prominent stock exchanges. Over the past two decades, financial planners have been increasingly recommending their clients to consider Exchange Traded Funds as a good investment option for achieving their long-term goals with minimal risk and goof returns. You can also invest in Gold ETF funds.

Investing in ETF Funds in India

Following are the major benefits of investing in ETF stocks bullet Flexibility to trade:

1. Higher liquidity

You can trade ETFs just like individual stocks on prominent stock exchanges such as BSE and NSE. Thus, ETF provides you with good liquidity.

2. Low cost of investment

ETFs are listed on the stock exchanges and mostly have a lower expense ratio compared with that of other mutual funds. This makes ETFs a relatively cheaper investment option.

3. Easy structure

The structure of ETFs as an investment option is easy to understand.

4. Tax-efficient investment option

Generally, investment in ETFs tend to generate capital gains, which are much lower than other investment options largely because of low turnover of portfolio securities. This makes them a tax-efficient investment option.

5. Portfolio diversification

Exchange Traded Funds ETF Investment helps you diversify your overall investment portfolio. Thus, they help you spread your risks more effectively.

Benefits of investing in ETF funds in India

You can buy or sell ETFs in two ways. That said, even before you commence your ETF investment, you need to consider the following points:

Step 1: You will need to open a trading account with a registered stock broker

Step 2: You will also have to open a Demat account online where you can hold your ETF units.

Please Note:

For completing the above formalities, you will need to be KYC compliant and will require to furnish documents such as:

  • Proof of identity (Passport, Driving License, PAN Card)
  • Proof of address (Passport, Utility Bill, Bank Statement)
  • Bank Account Details (Bank Statement)

Once you successfully complete all the above formalities, you will then be able to buy and/or sell ETFs through your trading account.

Disclaimer : *investment in securities market are subject to market risks, read all the related documents carefully before investing

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