Top ETF in India, Exchange Traded Mutual Funds, Top Performing ETFs (2024)

FAQs

Is India ETF a good investment? ›

India's stock market has been a standout performer in recent times, drawing attention from global investors. All India ETFs have returned in the range of 3% to 10% so far this year.

ETFs have lower expense ratios. Mutual funds have higher management fees. ETFs are passively managed, mirroring a particular index, making them less risky and transparent. Mutual funds are actively managed, with fund managers investing based on analysis and market outlook.

ETFs are useful for diversifying your portfolio. However, there are 3 risks of ETFs you need to be conscious of. Firstly, this is a market product and hence it is subject to the fluctuations of the market. While the trading starts around the indicative NAV, actual prices may fluctuate with the market conditions.

Dividends are shares of the profits received by the shareholders (equity scheme) of a company. Typically in India, ETFs (exchange-traded funds) don't pay out dividends to the investors. Instead, the proceeds received from the underlying securities are reinvested back into the scheme.

NRIs can invest in the Indian stock market through the purchase of equity shares, mutual funds, ETFs and derivatives. You can only conduct delivery-based trades, and there are restrictions on intraday trading or trading in currency derivatives and commodities.

Before purchasing an ETF there are five factors to take into account 1) performance of the ETF 2) the underlying index of the ETF 3) the ETF's structure 4) when and how to trade the ETF and 5) the total cost of the ETF.

The choice comes down to what you value most. If you prefer the flexibility of trading intraday and favor lower expense ratios in most instances, go with ETFs. If you worry about the impact of commissions and spreads, go with mutual funds.

They are usually managed by experienced professionals and that reduces the risk of losses an investor can incur. Investing in mutual funds provides diversification across multiple sectors/assets, reducing the risk of losses due to poor performance in one area.

Profits from ETF holdings of over 3 years are categorised as long-term capital gains. The ETF tax rate for these gains is 20% (with the benefit of indexation). The profits, if any, from these ETFs are always considered to be short-term capital gains. They are taxed at the applicable income tax slab rate.

Yes. You can invest in US ETFs. Investing in US ETFs by Indian investors is permitted under the RBI's Liberalized Remittance Scheme.

How can I buy ETF directly in India? ›

How to invest in ETF in India? ETF trades take place on the stock exchange where they are listed. To invest, investors must first open a trading account with a broker and also a Demat account.