What is an ETF in India?

An ETF (Exchange Traded Fund) is a financial product (or investment vehicle) that tracks/ replicates an index, commodity, or any other specified underlying asset, depending on its investment objective. Usually, its units are traded on a stock exchange during market hours, just like shares. For example, 

• A Nifty 50 ETF tracks the performance of the Nifty 50 Index.
• It invests in the same proportion (weightage) and in the same constituents as the Nifty50.

An investor can buy and sell ETF units through a trading account, while the units are held in a demat account.

Nifty ETF vs Index Fund

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