ETF

An ETF, or exchange traded fund, is a fund whose units are listed on a stock exchange and bought and sold there through a demat account.

An exchange traded fund is a mutual fund scheme whose units trade on the NSE and BSE like shares, through a broker and a demat account. Most ETFs in India track an index, such as the Nifty 50, or hold gold or silver.

How it differs from an ordinary open-ended fund:

Price. You trade at the market price during market hours, not at the end-of-day NAV. The two are usually close, but the market price can sit above or below the NAV, especially when few units change hands.
Cost. The expense ratio is often low, but you also pay brokerage, exchange charges and the gap between buying and selling prices.
One class. An ETF has a single class of units.
Buying. Each purchase is a buy order on the exchange, placed through your broker.

How closely an ETF follows its index shows in its tracking error.

An ETF fund of funds is different. It is an ordinary mutual fund that invests in an ETF and is bought from the fund house without a demat account. See fund of funds.

Look up a fund you hold

Each fund page has its returns, risk, costs, managers and everything it holds.

ETF