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Quick start with Exchange Traded Funds

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What are
Exchange Traded funds?

An Exchange Traded Fund (ETF) is a mutual fund scheme which is listed and traded on the stock exchange. Its portfolio tracks an index, a collection of stocks, bonds or a commodity.

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Advantages of Exchange Traded Funds

Passive investment

Usually ETFs track a particular index or a commodity, they do not rely on fund managers’ expertise for generating returns.

Versatile

There are different types of Exchange Traded Funds available in the market allowing you to choose onle that matches your needs.

Cost-effective

Being passively managed, ETFs have low expense ratios. This converts to higher NAVs which can deliver higher returns over the investment tenure.

Types Of Debt Funds

Our Life Insurance Plans

Aditya Birla Sun Life Medium Term Direct Plan Growth

  • Direct-Growth
  • Debt

Value Research Rating:

  • AUMAUM: 23427(Cr)
  • RISKRisk: Very High
  • MIN. INVESTMENT 500
  • 5 YRS RETURNS 33.32%
  • Invest (Per Month) ₹10000
  • Get (30 Yrs) ₹24,850*

*Projections/estimations is backtested using historical data.

Our Life Insurance Plans

Aditya Birla Sun Life Long Term Direct Plan Growth

  • Direct-Growth
  • Life

Value Research Rating:

  • AUMAUM: 23427(Cr)
  • RISKRisk: High
  • MIN. INVESTMENT 1000
  • 5 YRS RETURNS 33.32%
  • Invest (Per Month) ₹15000
  • Get (30 Yrs) ₹34,850*

*Projections/estimations is backtested using historical data.

Our Life Insurance Plans

Aditya Birla Sun Life Medium Term Direct Plan Growth

  • Direct-Growth
  • Debt

Value Research Rating:

  • AUMAUM: 23427(Cr)
  • RISKRisk: Very High
  • MIN. INVESTMENT 500
  • 5 YRS RETURNS 33.32%
  • Invest (Per Month) ₹10000
  • Get (30 Yrs) ₹24,850*

*Projections/estimations is backtested using historical data.

Our Life Insurance Plans

Aditya Birla Sun Life Long Term Direct Plan Growth

  • Direct-Growth
  • Life

Value Research Rating:

  • AUMAUM: 23427(Cr)
  • RISKRisk: High
  • MIN. INVESTMENT 1000
  • 5 YRS RETURNS 33.32%
  • Invest (Per Month) ₹15000
  • Get (30 Yrs) ₹34,850*

*Projections/estimations is backtested using historical data.

Our Life Insurance Plans

Aditya Birla Sun Life Medium Term Direct Plan Growth

  • Direct-Growth
  • Debt

Value Research Rating:

  • AUMAUM: 23427(Cr)
  • RISKRisk: Very High
  • MIN. INVESTMENT 500
  • 5 YRS RETURNS 33.32%
  • Invest (Per Month) ₹10000
  • Get (30 Yrs) ₹24,850*

*Projections/estimations is backtested using historical data.

Our Life Insurance Plans

Aditya Birla Sun Life Long Term Direct Plan Growth

  • Direct-Growth
  • Life

Value Research Rating:

  • AUMAUM: 23427(Cr)
  • RISKRisk: High
  • MIN. INVESTMENT 1000
  • 5 YRS RETURNS 33.32%
  • Invest (Per Month) ₹15000
  • Get (30 Yrs) ₹34,850*

*Projections/estimations is backtested using historical data.

Our Life Insurance Plans

Aditya Birla Sun Life Medium Term Direct Plan Growth

  • Direct-Growth
  • Debt

Value Research Rating:

  • AUMAUM: 23427(Cr)
  • RISKRisk: Very High
  • MIN. INVESTMENT 500
  • 5 YRS RETURNS 33.32%
  • Invest (Per Month) ₹10000
  • Get (30 Yrs) ₹24,850*

*Projections/estimations is backtested using historical data.

Our Life Insurance Plans

Aditya Birla Sun Life Long Term Direct Plan Growth

  • Direct-Growth
  • Life

Value Research Rating:

  • AUMAUM: 23427(Cr)
  • RISKRisk: High
  • MIN. INVESTMENT 1000
  • 5 YRS RETURNS 33.32%
  • Invest (Per Month) ₹15000
  • Get (30 Yrs) ₹34,850*

*Projections/estimations is backtested using historical data.

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investment portfolio

Invest in mutual funds online with the ABCD app and build your portfolio one click at a time.

  • Life Insurance
    A choice of different types of mutual fund schemes
  • Life Insurance
    Online investments with a fully integrated digital platform
  • Life Insurance
    Facility to switch, redeem and invest more from a single platform

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Understanding Debt Funds
  • What are Exchange Traded Funds?
  • What are the features of Exchange Traded Funds?
  • What are the different types of Exchange Traded Funds?
  • Who should invest in Exchange Traded Funds?
  • What is the tax implication of index funds?
  • What are some of the things to consider when investing in Exchange Traded Funds?

What are Exchange Traded Funds?

Different from other mutual funds, Exchange Traded Funds are schemes which are traded on the stock market. They invest in an underlying index or a commodity and help you earn returns equal to the benchmark index or commodity. You will need a trading/ demat account to buy or sell ETFs.

What are the features of Exchange Traded Funds?

  • Prices fluctuate constantly as ETFs are traded on the stock market

  • Different types of ETFs for different investors

  • Passively managed funds with a low expense ratio

  • ETFs can invest in particular indices, sectors and commodities

  • International ETFs are also available that invest in international markets

What are the different types of Exchange Traded Funds?

img Equity-oriented ETFs

They invest in equity-oriented indices.

img Sectoral or thematic ETFs

They invest in indices of a particular sector.

img Commodity ETFs

They invest in different types of commodities like gold, silver. etc.

img International ETFs

They invest in international indices.

img Inverse ETFs

ETFs which aim to deliver the opposite return of the underlying index.

img Leveraged ETFs

They invest in debt and debt-oriented derivatives.

img Debt ETFs

They invest primarily in debt instruments and indices.

Who should invest in Exchange Traded Funds?

  • New investors who want to invest in a particular index or commodity.

  • Investors looking to invest in low-cost schemes.

  • Investors who want portfolio diversification .

  • Investors looking for tradeable investments which can be easily liquidated.

What is the tax implication of index funds?

img Equity-oriented funds

• Returns up to Rs.1 lakh are tax-free
• Returns exceeding Rs.1 lakh are taxed at 10%

img Debt-oriented funds

• Returns earned are taxed at income tax slab rates

img Dividend income is taxed at your income tax slab rates

What are some of the things to consider when investing in Exchange Traded Funds?

  • Check the past performance and choose a fund which has offered consistent returns.

  • Know the trading volume of the ETF to assess its demand.

  • Though it is low, check the expense ratio of the fund.

  • There will be a tracking error and the returns might not be equal to those of the underlying index or commodity.

Bonds

Guaranteed returns, liquid trading

  • Life Insurance
    Diverse bond types
  • Life Insurance
    Stable portfolio returns
LI Retirement Plan

Secure retirement with Life Insurance

  • Life Insurance
    Secure regular pensions
  • Life Insurance
    Save on taxes

FAQs On Debt Funds

Exchange Traded Funds (ETFs) are essentially mutual fund schemes or index funds that are listed and traded on an exchange, akin to stocks. ETFs can be purchased and sold throughout the trading day, offering investors the opportunity to capitalize on intraday price movements. An additional advantage of ETFs is the ability to buy even a single unit, allowing exposure to the entire index at minimal amounts.

To invest in ETF one need to have a Trading and Demat account as ETFs are exchange traded. Once one have opened the trading and demat account, he/ she can select the ETF he wants to invest and place the order through trading account. ETF orders can be placed during market hours.

ETFs provide numerous benefits to investors:

Convenient Buying/Selling: Easily tradeable like any other stock on the exchange through trading account.

Real-Time Prices: Buy or sell at current market prices in real-time.

Limit Orders: Ability to place limit orders for added control over transactions.

Seamless Process: No need for separate form filling; units are delivered directly to your demat account.

Minimal Investment: Minimum investment is just one unit, offering flexibility.

Lower Expense Ratio: ETFs typically have a lower expense ratio compared to index funds.

No STT on Purchase: There is no Securities Transaction Tax (STT) on the purchase of GOLD ETFs, LIQUID and Gilt ETFs, and some international ETFs.

STT is applicable on other type of ETF as below

- 0.001% on the sell side for delivery and BTST trades.

- 0.025% on the sell side for intraday trades.

Although the Expense Ratio of ETFs is typically low, there are specific costs unique to ETFs. As ETFs are acquired as shares through a broker, investors may incur brokerage charges with each purchase. Additionally, investors may face customary trading costs, including variations in the ask-bid spread, etc. It's worth noting that traditional Mutual Fund investors also indirectly bear similar trading costs, as the Fund covers these costs through expense ratio.

Index ETFs: These funds are crafted to replicate a specific index like Nifty50 or Sensex.

Fixed Income ETFs: Designed to offer exposure to a wide range of available bonds.

Sector ETFs: Tailored to provide exposure to specific industries, like oil, pharmaceuticals, or high technology.

Commodity ETFs: Crafted to track the price movements of specific commodities such as gold, oil, or corn.

Leveraged ETFs: Geared towards using financial leverage to enhance returns.

Actively Managed ETFs: In contrast to those tracking an index, actively managed ETFs aim to outperform it.

ETNs (Exchange-Traded Notes): These are debt securities secured by the issuing bank's creditworthiness, facilitating access to illiquid markets while offering the advantage of generating minimal short-term capital gains taxes.

Alternative Investment ETFs: Examples include funds allowing investors to trade volatility or gain exposure to specific investment strategies like currency carry or covered call writing.

Style ETFs: These funds are designed to mirror a particular investment style or market size focus, such as large-cap value or small-cap growth.

International ETFs: Tailored to monitor non-Indian markets, examples include those linked to Japan's Nikkei Index or Hong Kong's Hang Seng Index.

Inverse ETFs: Crafted to profit from a decline in the underlying market or index.

 

Other asset class funds

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Debt Funds

Invest in debt securities for low risks and stable returns.

Know More
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Fund of Funds

Mutual funds that invest in other mutual funds both in India and globally

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Hybrid Funds

Get a mix of equity, debt and other asset classes for a diversified portfolio

Know More
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Index Fund

Passively-managed mutual funds tracking a particular index

Know More

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