ETF in India - Trade Smarter, Invest Wiser
Invest in ETFs across equity, gold, debt, and thematic categories, with live prices, zero account-opening charges, and expert support from Shriram Financial Services. Whether you are just starting or scaling a portfolio, your ETF journey begins here.
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Exchange-Traded Funds: Diversified Investing Made Flexible
Exchange-Traded Funds (ETFs) combine the diversification of mutual funds with the flexibility of stock market trading, making them a preferred choice for investors seeking cost-efficient market exposure. Shriram Financial Services offers access to a curated range of equity, debt, and gold ETFs, each tradeable in real time at prices that track their underlying index closely. For investors who want diversification without the overhead of active fund selection, our ETF shelf stays transparent, liquid, and easy to enter or exit.
Key terms every ETF Investor should know:
- NAV (Net Asset Value): the per-unit value of the fund's underlying assets, calculated once at the end of each trading day.
- iNAV (Indicative NAV): a real-time estimate of an ETF's fair value, published throughout the trading session, so the market price doesn't drift too far from the underlying assets.
Note: ETFs have an NAV, but unlike regular mutual funds, ETF transactions are executed at the market price rather than the NAV.
How Exchange-Traded Funds Work?
An ETF maintains price efficiency and liquidity through a sophisticated 5-step creation and redemption mechanism involving Authorised Participants (APs), the AMC, and the stock exchange. This process prevents the ETF's market price from drifting far from the real value of its underlying assets.
Here is how the process works, step by step:
Basket Assembly by Authorised Participant
AP purchases pre-defined securities basket mirroring the ETF's target index
Units Are Created with the AMC
AP delivers the security basket to the AMC who issues new ETF units to the AP
Listed on Exchange
ETF units trade on NSE and BSE at market prices
ETF Trading
Investors buy units via broker (Shriram Financial Services) at market price
Redemption Process
AP returns ETF units to the AMC for the underlying basket.
What are the Types of ETFs Available in India?
India's Exchange-Traded Fund market has evolved substantially since the country's first ETF. Today, investors can access seven distinct categories of ETFs on NSE and BSE, spanning asset classes, geographies, and investment strategies. Here is a definitive overview of every type of ETF available in India:
Equity ETF
Tracks a stock market index such as the Nifty 50 or Sensex, giving you exposure to a diversified basket of large, liquid companies in a single trade.
Gold & Silver ETF
Commodity-based ETFs backed by physical gold or silver held in secure vaults, letting you invest in precious metals without the storage, purity, or making-charge concerns of physical bullion.
Debt/Bond ETF
Invests in government securities, treasury bills, or corporate bonds, offering relatively stable, income-oriented exposure to fixed income markets.
Sectoral/Thematic ETF
Focused ETFs that provide exposure to specific sectors or investment themes such as banking, technology, infrastructure, or manufacturing.
International ETF
Tracks a foreign index (e.g., Nasdaq 100 or S&P 500), giving Indian investors a route to global diversification through a domestic demat account.
Smart Beta ETF
Follows rule-based strategies (such as low-volatility, momentum, or quality factors) that combine passive investing with factor-based portfolio construction, rather than simple market-cap weighting, aiming to improve risk-adjusted returns.
Index ETF
A broad term for any ETF that passively replicates a market index, the most common and lowest-cost category of ETF in India.
Different ETF categories may suit different investment goals, making it important to evaluate investment objectives, risk tolerance, and time horizon before investing.
Key Differences Between ETFs and Mutual Funds
Choosing between an Exchange-Traded Fund and a mutual fund depends on how much flexibility you want in your trading, your investment horizon, and your focus on minimising costs. While both options offer diversified portfolios managed by professional AMCs, their operational setups result in different fee structures and liquidity profiles.
Here's a side-by-side comparison:
Parameters
ETF
Mutual Fund
Trading Hours
Real-time, throughout market hours (9:15 am–3:30 pm)
24x7
Expense Ratio/Brokerage
Typically 0.05%–0.50% (passive)
Typically 0.50%–2.25% (active funds)
SIP Availability
Yes, available
Yes Available
Demat Account Needed
Yes, mandatory
Optional
Taxation
Same capital gains rules as equities/debt by category
Same capital gains rules by category
Liquidity
Depends on trading volume on the exchange
Guaranteed at NAV via the AMC
Transparency
Holdings are visible post settlement. (Users can view unsettled/T1 Quantity as well)
Holdings are visible post settlement
Stock price /NAV Frequency
Real time streaming during market hours
Calculated once, end-of-day
When to Choose an ETF:
- You have a demat account and want a smart investment.
- You want intraday pricing or tactical entry/exit flexibility.
- You are building a large passive portfolio where the expense ratio matters at scale.
When to Choose a Mutual Fund:
- You want a fully automated SIP without manual intervention.
- You do not have a demat account.
- You prefer guaranteed NAV execution without bid-ask spread risk.
How to Invest in Exchange-Traded Funds?
Buying an ETF in India requires a demat account and a trading account with a SEBI-registered broker. Shriram Financial Services makes the entire process fully digital, via the Antara app, and completes onboarding in a few minutes.
Here is how to invest in ETFs with Shriram Financial Services:
Open Demat Account
Sign up via Antara app; KYC with PAN, Aadhaar
Activate Account
Link your bank account, enable trading and add funds.
Search ETF ticker
Search the ETF by name or ticker on NSE/BSE
Place a buy order
Choose market or limit order, enter quantity
Units credited T+1
ETF units credited to demat on T+1 basis
Track your holdings
Monitor prices, NAV, performance on the app
For regular investors, Shriram Financial Services supports a manual ETF SIP mechanism (predefined ETF basket), enabling you to schedule recurring purchases aligned with your investment cadence.
Start Buying ETFsCan you do a Systematic Investment Plan (SIP) in ETFs?
Yes, you can do a SIP in Exchange-Traded Funds, but it works differently from a mutual fund SIP. In a mutual fund SIP, your bank account is debited automatically via NACH mandate, and units are allotted at end-of-day NAV. In an ETF SIP, you initiate the purchase manually (or via a broker-facilitated trigger) during market hours, at live exchange prices.
Parameters
ETF SIP
Mutual Fund SIP
Execution Method
Manual trigger or broker-facilitated mandate creation & order execution during market hours.
Fully automated via NACH bank mandate
Pricing
Live exchange price at the time of execution
End-of-day NAV (fixed price)
Demat Account Needed
Required
Not required / Optional
Minimum Amount
1 unit of ETF (price varies by ETF)
As low as ₹100–500
Flexibility
Can skip, modify, or stop any month easily
Pause/stop via the Purse+ app
Brokerage
Standard brokerage per trade applies
No brokerage; expense ratio embedded in NAV
Rupee Cost Averaging
Applies - buy at different prices each cycle
Applies - buy at different NAVs each cycle
ETF Charges and Expense Ratio
Exchange-Traded Funds are popular largely because of their low total cost of ownership compared to actively managed mutual funds. Here's a breakdown of what you actually pay when investing in an ETF:
Cost Component
What It Is
Typical Rate (India 2025)
Who It Goes To
Brokerage
Broker's fee for executing your buy/sell order on exchange
₹0–₹20 per order or 0.01%–0.05% (flat-fees)
Stockbroker
Securities Transaction Tax (STT)
Government tax on equity ETF transactions
0.1% on delivery buy; 0.025% on intraday sell
Government
GST on Brokerage
18% GST applied to the brokerage amount
18% of brokerage charged
Government
Depository Participant (DP) Charges
Charge for debiting ETF units from your demat on sale
₹12–₹25 per scrip per day of sell (varies by DP)
CDSL / NSDL via broker
Impact Cost/Bid-Ask Spread
Implicit cost due to gap between buy and sell price on exchange
0.01%–0.30% depending on ETF liquidity
Market
Put together, the total cost of owning a passive Nifty 50 ETF can work out to roughly 0.10%–0.30% a year, compared to 1%–2.25% for an actively managed equity mutual fund - a meaningful difference over a long investment horizon once compounding is factored in.
How are ETF Gains Taxed in India?
ETF taxation in India depends on the type of ETF and how long you hold it. Equity ETFs may qualify for equity taxation, while Gold and Debt ETFs are taxed differently. Since tax rules can vary by product and may change over time, investors should check the latest tax provisions before investing or redeeming. Here's how each major ETF category is taxed:
ETF Type
Tax Treatment
Rate
Holding Period
Equity ETF
STCG if held under 12 months; LTCG if held 12+ months
STCG: 20% | LTCG: 12.5% above ₹1.25L/year
LTCG threshold: 12 months
Gold ETF
LTCG applies after 24 months; STCG before that
LTCG: 12.5% (no indexation) | STCG: Income slab rate
LTCG threshold: 24 months
Silver ETF
Same treatment as Gold ETF
LTCG: 12.5% after 24 months | STCG: Slab rate
LTCG threshold: 24 months
Debt / Bond ETF
All gains added to total income (post-Apr 2023)
Income slab rate - regardless of holding period
No LTCG benefit post-Apr 2023
International ETF
Treated as debt funds for tax (post-Apr 2023 Finance Act)
Income slab rate - regardless of holding period
No LTCG benefit post-Apr 2023
Note: Tax rates cited are for FY 2025-26 as per Budget 2024. Rates are subject to change. Consult a SEBI-registered tax advisor for personalised guidance.
Speak to our Advisor/RMTop ETFs to Consider - Nifty 50, Gold, Banking & More
Selecting the right Exchange-Traded Fund requires evaluating more than just past returns. The key parameters are the size of assets under management (AUM) (larger AUM means stronger market activity and smaller bid-ask spreads), better liquidity, expense ratio (lower is better), tracking error (closer to zero is better), and alignment with your investment objective.
Rather than a definitive ranking, here's a curated look at category-leading ETFs worth considering, based on AUM, cost, and trading liquidity:
Category
Example ETF
AUM / Expense Ratio
Nifty 50 ETF
Tracks the Nifty 50 index
High AUM · Low expense ratio
Gold ETF
Tracks domestic gold prices
High AUM · Low expense ratio
Banking ETF
Tracks the Bank Nifty / banking index
Moderate AUM · Low expense ratio
IT ETF
Tracks the Nifty IT index
Moderate AUM · Low expense ratio
Before investing in any ETF, we recommend reviewing the scheme's factsheet for current AUM, tracking error, and portfolio composition.
Invest in ETFsHow to Build an ETF Portfolio?
Building an ETF portfolio in India involves the following steps:
Set Your Goal
Match your goal and timeline to equity, debt, gold split
Asset Allocation
Allocate across equity, debt and gold based on risk and horizon
Select ETFs
Pick high AUM, low expense ratio ETFs per category
Invest and Review
Set up SIPs and review allocation annually
ETFs are versatile building blocks for a low-cost, diversified portfolio. Here are two model approaches, from simple to more advanced:
Beginner: The 3-ETF Portfolio
- Nifty 50 ETF (60%): Core equity exposure to India's largest companies
- Gold ETF (20%): A hedge against inflation and equity market volatility
- Debt ETF (20%): Stability and income, reducing overall portfolio risk
Advanced: Core-Satellite Strategy
- Core - Nifty 50 ETF (40%): Stable, broad-market foundation of the portfolio
- Satellite - Midcap ETF (20%): Higher growth potential from mid-sized companies
- Satellite - International ETF (20%): Geographic diversification beyond Indian markets
- Satellite - Gold ETF (20%): A tactical hedge and portfolio stabiliser
Regardless of which model you start with, the core principle of ETF portfolio construction is consistency over complexity: choose low-cost, high-AUM ETFs, invest regularly via a disciplined SIP cadence, and review allocations annually (or after major life events) rather than reacting to short-term market movements.
Note: The ETF portfolio strategies shared above are for informational purposes only, intended to help investors understand different approaches to portfolio building, and do not assure any specific outcome. Investors should evaluate their financial goals, risk appetite, and investment horizon before making any investment decision.
Build Your PortfolioRisks of Investing in ETFs
ETFs are among the most transparent and well-regulated investment products in India, but like any market-linked instrument, they carry risks that every investor must understand before committing capital. The good news - most ETF-specific risks are manageable with informed fund selection and disciplined investing behaviour.
Risk Type
What It Means
How to Manage It
Market Risk
ETF prices fall when the underlying index or asset class declines - unavoidable in any equity or commodity investment
Invest with a long time horizon (5+ years for equity ETFs); use SIP to average costs
Tracking Error
The ETF's return may deviate from its benchmark index return due to cash holdings, replication methodology, or expense drag
Choose ETFs with consistently low tracking error (below 0.10% for index ETFs); review factsheets
Liquidity Risk
Low-volume ETFs may have wide bid-ask spreads, making it expensive to buy or sell at fair value
Prefer ETFs with high AUM (above ₹500 Cr) and active daily trading volumes on NSE/BSE
Impact Cost
Large orders in illiquid ETFs can move the price against you, increasing your effective cost
Use limit orders instead of market orders; avoid thinly traded sectoral ETFs for large ticket sizes
Low AUM Risk
ETFs with very small AUM may be wound up by the AMC, forcing premature redemption
Avoid ETFs with AUM below ₹100 Cr; check the AMC's ETF track record and commitment
Delisting Risk
Close-ended ETFs or ETFs with insufficient investor interest may be delisted from the exchange
Invest primarily in open-ended, SEBI-compliant ETFs with diversified investor bases
Currency Risk
International ETFs carry USD/INR exchange rate risk - rupee depreciation can amplify or reduce returns
Size international ETF allocation appropriately (10–20% of total portfolio)
Regulatory Note: Mutual fund ETFs in India are regulated by SEBI. Past performance of any ETF does not guarantee future returns. Please read the Scheme Information Document (SID) and Key Information Memorandum (KIM) before investing.
Who Should Invest in ETFs?
ETFs are not a one-size-fits-all product, but their versatility means they can serve a surprisingly wide range of investor profiles - from a salaried professional starting their first investment to an HNI building a multi-crore passive portfolio. Here is how ETFs align with different investor types:
Investor Profile
Who They Are
Best ETF Type
Why ETFs Work Here
Beginner Investor
First-time investors, students, young earners (22–30 years)
Nifty 50 ETF, Gold ETF
Low cost, simple to understand, no stock-picking needed; builds a disciplined investing habit
Salaried Professional
Mid-career earners seeking wealth creation alongside regular income
Nifty 50 ETF + Midcap ETF via SIP
Cost-efficient long-term compounding; aligns with monthly income cycle via manual ETF SIP
Active Trader
Investors who actively monitor markets and seek tactical opportunities
Sectoral ETF, Smart Beta ETF, Bank ETF
Intraday tradability, liquidity, and sector-level precision without stock-specific risk
HNI/Institutional Investor
High net-worth investors with large ticket sizes (₹25L+)
Index ETF basket, International ETF, Smart Beta
Tax-efficient portfolio construction; low cost at scale; core passive allocation for large portfolios
NRI Investor
Non-resident Indians seeking India market exposure
Nifty 50 ETF, Gold ETF (via NRO/NRE demat)
SEBI-regulated, exchange-traded; accessible via NRI demat; simpler than direct equity for NRIs
Retirement Planner
Investors 40–55 years, building retirement corpus
Debt ETF (Bharat Bond) + Gold ETF + Nifty 50
Asset allocation flexibility; low cost; ability to shift from equity to debt ETF as retirement nears
Documents & Eligibility Criteria
To invest in ETFs in India, you need a demat account and a trading account with a SEBI-registered stockbroker. The documentation process is entirely digital on our platform and requires the following:
Document
Purpose
Accepted Formats
PAN Card
Mandatory identity & tax proof
Physical card or e-PAN PDF
Aadhaar Card
Identity & address verification (e-KYC)
Aadhaar card or e-Aadhaar
Bank Proof
Linking your bank account for settlements
Cancelled cheque or bank statement
Eligibility:
- Indian Residents: Any Indian resident above 18 years of age with a valid PAN and Aadhaar is eligible to open a demat account and invest in ETFs.
- NRIs: They can invest via NRO or NRE demat accounts under FEMA guidelines.
- Minors: They can invest through a guardian-operated account.
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Got Questions?
View All FAQsAn ETF, also known as an Exchange-Traded Fund, is an investment fund designed to mirror an index that pools investor money into a basket of securities such as stocks, gold, or bonds, and trades on the stock exchange (NSE/BSE) in real time throughout market hours, just like a regular share.
Open a demat account, search for ETF on the app or web platform, place a buy order at market or limit price, and units are credited on T+1.
ETFs carry standard market risk tied to their underlying assets, but they are transparent, regulated by SEBI, and generally considered lower-risk than picking individual stocks due to built-in diversification.
Yes, through manual or scheduled recurring orders placed via your broker, since ETFs don't have a native auto-debit mandate like mutual funds.
Need A Clearer Direction?
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