Are Exchange Traded Funds The Right Investment For You?

Difference Between ETFs and Index Funds

Exchange Traded Funds (ETFs) have emerged as a popular investment option in India, providing investors with a convenient and cost-effective way to gain exposure to a diversified portfolio of securities. These funds have achieved significant traction due to their unique characteristics and potential benefits. Vardan Pandhare explores the world of ETFs as an investment avenue

Exchange Traded Funds (ETFs) are a type of investment fund that are traded on a stock exchange. They are similar to mutual funds, but they have some key differences. ETFs are passively managed, which means that they track a specific market index such as the Nifty or the Sensex. This implies that they are less expensive than mutual funds, which are actively managed. ETFs can also be traded throughout the day, just like stocks. In 2022, the total assets under management (AUM) of ETFs in India were over Rs 1 trillion. This is a significant increase from the AUM of Rs 200 billion in 2015.