Exchange Traded Funds(ETFs)

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What is an ETF?

ETFs are essentially index funds that are listed on an exchange and track the price performance of the target index closely. The ETF trading value is based on the net asset value (NAV) of the underlying stocks in the target index. E.g., a Nifty ETF will look to replicate CNX Nifty returns.

ETFs are popular world over with nearly 60% of trading volumes on the American Stock Exchange (AMEX) captured by all types of ETFs. At the end of June 2011, the global ETF industry comprised 2,825 ETFs from 146 providers on 49 exchanges around the world with total assets of US$1.49 trillion (Source: www.ifaonline.co.uk).

The ETF advantage

  • Trade like stocks

    - You can buy and sell an ETF during market hours on a real time basis as well as put advance orders on purchase such as limits or stops. In case of conventional mutual funds, purchase or sale can be done only once a day after the fund NAV is calculated.
  • Low cost of investment

    - The passive investment style with low turnover helps keep costs low. ETFs are known to have among the lowest expense ratios compared to others schemes.
  • Diversification benefit

    - In case of Nifty ETF, you own the complete basket of 50 stocks and remain diversified.
  • Simple and transparent

    - The underlying securities are known and quantities are pre-defined (In case of conventional mutual fund schemes, one needs to wait for the monthly factsheet). No form filling is required if you transact in the secondary market. Investment can be made directly from the fund house or the exchange.
  • Supports small ticket investments - ETFs are a great tool for investors wanting to start with a small corpus. The minimum ticket size is 1 unit (in case of IIFL Nifty ETF, 1 unit is approximately 1/10th of Nifty level, i.e Rs500, when Nifty is at 5000). Premium and discount also tends to be higher in the futures segment, than in ETFs.
  • ETFs are taxed like stocks - Investors can take advantage of special rates for short term and long-term capital gains.
Target audience
  • Long term investors
  • First time investors
  • Investors looking for a low cost diversified portfolio
  • Traders who do not have enough capital to invest in index futures
  • Institutional investors looking to temporarily park cash during portfolio transition
  • Arbitrageurs to carry out operations with low impact cost
Concept of tracking error

The extent to which the NAV of the scheme moves in a manner inconsistent with the movements of the underlying Index on any given day or over any given period of time due to any cause or reason whatsoever including but not limited to expenditure incurred by the scheme, dividend payouts if any, all cash not invested at all times as it may keep a portion of funds in cash to meet redemption, purchase price different from the closing price of securities on the day of rebalance of Index, etc.

Points to note before investing in ETFs
  • Invest in ETFs with ample secondary market liquidity - Fund houses do depend on market makers and arbitrageurs to maintain liquidity to keep the price in line with the actual NAV.
  • ETFs track the target index – Any investor wanting an exposure to a particular target index like Nifty will do well by investing in ETFs. The objective of ETF is to be the index rather than beat the Index.
  • Always invest in key benchmarks ETFs rather than sectoral funds - Investing in sectoral ETFs is prone to higher volatility compared to key benchmark ETFs like Nifty.
  • Cost of trading on the exchange - Investor will have to bear the cost of brokerage and other applicable statutory levies e.g, Securities Transaction Tax, etc, when the units are bought or sold on the stock exchange.
ETF Performance
Scheme Name AUM(Rs.in Cr) NAV(Rs.) 1w % 3m % 6m % 1y % 3y % Since Incp.
Nippon India ETF Nifty Midcap 150 300.44 102.95 1.29 13.37 32.64 92.80 0 25.89
Motilal Oswal Midcap 100 ETF 57.06 28.37 1.21 14.15 32.27 91.86 13.89 13.17
ICICI Pru Midcap 150 ETF 59.66 102.76 1.29 13.36 32.55 91.34 0 436.72
Nippon India ETF PSU Bank BeES 114.17 26.84 0.71 7.32 35.07 79.97 [6.95] 0.21
Kotak PSU Bank ETF 124.89 240.75 0.72 7.18 34.85 79.70 [7.12] [0.37]
Edelweiss ETF - Nifty Bank 1.27 3,538.71 0.46 0.50 15.14 77.34 10 15.14
Aditya Birla SL Banking ETF 116.35 347.93 0.46 0.30 14.91 76.98 0 11.10
SBI ETF Nifty Bank 3,792.38 348.98 0.46 0.26 14.90 76.95 9.70 10.96
ICICI Pru Bank ETF 1,466.41 348.16 0.46 0.30 14.95 76.95 0 7.38
Nippon India ETF Bank BeES 8,407.88 351.88 0.46 0.24 14.87 76.84 9.66 18.27
Kotak Banking ETF 7,482.85 352.96 0.46 0.22 14.82 76.52 9.60 10.23
ICICI Pru Midcap Select ETF 24.09 93.32 0.90 7.82 20.85 72.65 11.45 13.25
ICICI Pru S&P BSE 500 ETF 47.29 222.28 0.93 9.13 22.17 70.50 14.68 13.90
Tata Nifty Private Bank ETF 12.93 185.88 0.22 [1.03] 9.61 70.18 0 11.87
Kotak NV 20 ETF 16.94 85.93 1.20 8.81 21.87 69.85 19.04 17.93
ICICI Pru NV20 ETF 11.96 84.35 1.20 8.83 21.89 69.62 19.01 18.23
ICICI Pru Private Banks ETF 1,968.55 181.33 0.23 [1.49] 9.18 69.22 0 7.91
Nippon India ETF NV20 32.08 87.00 1.19 8.72 21.69 69.20 19.47 15.28
SBI ETF SENSEX Next 50 4.19 449.74 0.40 10.04 23.39 65.97 0 14.34
Bharat 22 ETF 6,842.56 40.18 0.17 6.89 26.02 65.94 4.66 2
UTI-S&P BSE Sensex Next 50 ETF 1.90 44.84 0.40 10.03 23.35 65.73 0 15.55
Nippon India ETF Sensex Next 50 15.31 44.29 0.40 10.04 23.20 65.36 0 24.33
SBI BSE 100 ETF 5.19 168.13 0.93 7.40 18.58 64.51 14.49 11.74
Nippon India ETF Shariah BeES 6.99 400.22 2.31 10.07 18.66 63.98 16.96 15.32
Tata Nifty Exchange Traded Fund 271.16 162.26 0.95 6.72 17.72 63.81 0 17.86
Mirae Asset Nifty 50 ETF 522.33 161.79 0.96 6.71 17.66 63.65 0 17.92
Indiabulls Nifty50 Exchange Traded Fund 15.90 162.82 0.95 6.70 17.65 63.65 0 16.80
HDFC Nifty 50 ETF 775.96 167.64 0.96 6.71 17.67 63.52 14.84 15.54
Aditya Birla SL Nifty ETF 273.28 174.17 0.96 6.71 17.67 63.51 14.74 12.32
SBI ETF Nifty 50 94,789.20 160.18 0.96 6.71 17.66 63.50 14.84 12.14
Nippon India ETF Nifty BeES 3,016.25 169.33 0.96 6.71 17.67 63.50 14.88 16.17
Edelweiss ETF - Nifty 50 2.47 17,196.36 0.96 6.69 17.61 63.47 14.83 13.02
ICICI Pru Nifty ETF 1,988.85 168.38 0.96 6.72 17.69 63.46 14.85 14.51
Quantum Nifty ETF 9.54 1,640.10 0.96 6.68 17.61 63.45 14.76 12.33
LIC MF ETF NIFTY 664.95 167.26 0.96 6.66 17.56 63.45 14.87 14.65
Kotak Nifty ETF 1,050.86 165.35 0.96 6.69 17.61 63.37 14.74 12.20
Invesco India Nifty ETF 41.06 1,710.23 0.96 6.68 17.63 63.37 14.79 12.39
AXIS Nifty ETF 32.79 164.61 0.96 6.69 17.63 63.36 14.85 14.60
Motilal Oswal M50 ETF 24.94 155.72 0.95 6.67 17.55 63.21 14.62 6.61
LIC MF ETF Nifty 100 411.80 168.13 0.86 7.57 18.20 62.51 14.10 16.48
IDFC Nifty ETF 17.96 164.92 0.95 6.59 17.36 62.31 14.73 14.77
ICICI Pru Nifty 100 ETF 19.11 173.08 0.86 7.55 18.21 62.22 14.11 16.44
Nippon India ETF Nifty 100 115.35 164.84 0.85 7.51 18.11 61.61 13.34 14.24
SBI ETF SENSEX 42,360.99 551.88 1.11 5.14 14.77 60.86 15.29 14.89
LIC MF ETF Sensex 532.91 560.87 1.11 5.12 14.71 60.75 15.31 14.86
HDFC Sensex ETF 93.18 561.35 1.11 5.13 14.72 60.71 15.26 15.89
Nippon India ETF Sensex 31.47 568.70 1.11 5.12 14.69 60.60 15.23 11.91
ICICI Pru Sensex ETF 64.40 568.17 1.11 5.11 14.70 60.57 15.21 17.23
Aditya Birla SL Sensex ETF 9.59 499.19 1.11 5.12 14.70 60.54 13.24 12.85
Kotak Sensex ETF 17.24 548.18 1.11 5.07 14.59 60.41 15.04 10.91
ICICI Pru Nifty Next 50 ETF 153.36 39.51 0.38 13.36 22.86 59.46 0 9.86
IDFC Sensex ETF 0.73 548.46 1.09 4.98 14.40 59.39 15.07 15.48
UTI-Nifty ETF 24,523.66 1,648.61 0.96 6.71 14.68 59.36 13.85 13.93
UTI-Nifty Next 50 ETF 470.67 40.34 0.39 13.41 22.89 59 11.40 9.68
SBI ETF Nifty Next 50 727.47 401.50 0.39 13.36 22.82 58.55 11.15 12.77
Aditya Birla SL Nifty Next 50 ETF 85.34 393.56 0.39 13.34 22.78 58.53 0 14.78
Nippon India ETF Junior BeES 1,513.92 405.97 0.39 13.30 22.75 58.47 11.16 20.85
Nippon India ETF Dividend Opportunities 2.38 40.18 1.13 9.23 19.34 57.94 10.78 12.58
Mirae Asset Nifty Next 50 ETF 53.60 387.04 0.39 13.44 22.89 57.17 0 23.40
Edelweiss ETF - Nifty 100 Quality 30 11.73 387.79 1.54 8.82 14.05 56.86 12.25 13.28
UTI-Sensex ETF 12,824.00 548.33 1.11 5.13 11.81 56.71 14.31 14.04
ICICI Pru Nifty Low Vol 30 ETF 273.35 130.15 1.18 10.38 17.73 56.45 14.87 15.62
CPSE ETF 13,363.55 26.69 1.98 11.38 26.77 54.82 [0.11] 6.10
Nippon India ETF Infra BeES 19.55 457.58 [0.62] 6.29 22.32 53.04 12.40 1.91
SBI ETF Quality 24.58 138.02 1.17 9.76 14.35 52.58 0 17.71
Motilal Oswal NASDAQ-100 ETF 3,209.87 1,005.56 2.91 9.88 12.88 41.17 27.99 25.01
Nippon India ETF Consumption 18.17 68.37 1.08 8.50 10.44 39.11 8.79 13.98
Nippon India ETF Hang Seng BeES 41.52 348.08 0.10 1.07 9.41 18.13 3.20 9.66
BHARAT Bond ETF - April 2030 10,606.44 1,158.94 0.29 4.77 2.89 8.72 0 10.76
BHARAT Bond ETF - April 2023 5,308.83 1,132.44 0.12 2.31 2.32 7.41 0 8.92
Nippon India ETF Long Term Gilt 14.64 22.55 [0.11] 3.15 1.05 3.97 10.32 8.03
DSP Liquid ETF - Reinvest (Div-D) 69.01 1,000.00 0.04 0.78 1.60 3.93 5.22 5.32
LIC MF G-Sec Long Term ETF 398.97 22.17 [0.11] 3.07 0.82 3.72 9.96 8.08
SBI ETF 10 Year Gilt 2.50 205.61 [0.15] 2.63 1.74 3.15 9.16 7.15
ICICI Pru Liquid ETF 182.64 1,000.00 0.04 0.72 1.40 2.86 0 4.17
Aditya Birla SL Gold ETF 264.26 4,443.56 [0.80] 8.76 [1.36] 2.62 15.11 7.11
AXIS Gold ETF 380.54 42.13 [0.81] 8.71 [1.32] 2.61 15.13 7.28
IDBI Gold ETF 85.26 4,485.67 [0.81] 8.95 [1.28] 2.56 15.05 4.68
SBI ETF Gold 1,930.39 4,335.06 [0.81] 8.77 [1.40] 2.44 15.03 9.30
Kotak GOLD ETF 1,566.28 422.39 [0.81] 8.75 [1.40] 2.42 15.03 11.96
Invesco India Gold ETF 71.77 4,385.18 [0.99] 8.65 [1.52] 2.35 15.10 8.89
Quantum Gold Fund (G) 127.68 2,097.91 [0.82] 8.69 [1.55] 2.14 14.80 9.69
Nippon India ETF Gold BeES 5,416.87 42.19 [0.82] 8.36 [1.57] 2.13 14.81 11.11
ICICI Pru Gold ETF 1,666.23 43.19 [0.98] 8.53 [1.64] 2.12 14.76 7.94
UTI-Gold ETF 508.17 42.36 [0.83] 8.79 [1.69] 1.86 14.75 11.12
HDFC Gold ETF 2,144.96 43.30 [1.65] 7.80 [2.26] 1.50 14.43 8.37
Nippon India ETF Liquid BeES 3,039.52 1,000.00 0.06 0.83 1.38 1.38 0.48 4.71
ICICI Pru IT ETF 1,642.89 287.32 2.72 9.40 25.44 0 0 57.07
AXIS Banking ETF 52.63 350.43 0.46 0.57 15.23 0 0 41.17
Nippon India ETF Nifty SDL - 2026 Maturity 14.45 103.48 0.22 0 0 0 0 2.41
Mirae Asset ESG Sector Leaders ETF 119.14 26.91 0.89 7.17 16.87 0 0 21.46
HDFC Banking ETF 164.52 349.81 0.46 0.18 14.80 0 0 57.88
Nippon India ETF Nifty IT 754.92 28.82 2.71 9.56 25.62 0 0 94.77
Nippon India ETF Nifty CPSE Bond Plus SDL (2024 M) 1,032.62 105.03 0.08 3.19 2.16 0 0 2.79
Motilal Oswal 5 Year G-Sec ETF 30.96 48.26 [0.32] 2.76 1.29 0 0 1.44
BHARAT Bond ETF - April 2025 7,102.64 1,044.02 0.11 3.32 2.20 0 0 4.62
BHARAT Bond ETF - April 2031 7,789.61 1,040.35 0.30 4.77 2.88 0 0 4.31
SBI ETF Private Bank 3.76 183.86 0.23 [1.48] 9.19 0 0 37.85
UTI-Bank Exchange Traded Fund 27.21 35.01 0.46 0.26 14.90 0 0 49.79
SBI ETF IT 447.75 287.72 2.72 9.64 25.72 0 0 34.16
AXIS Technology ETF 3.64 285.65 2.71 0 0 0 0 10.66
ICICI Pru Alpha Low Vol 30 ETF 42.51 157.61 1.69 13.45 17.88 0 0 34.66
Kotak IT ETF 1.84 28.55 2.72 9.44 0 0 0 12.23