Smallcase vs Direct Mutual fund vs Individual Stocks Vs ETF

[Bhuvan]

An ETF for your undersatnding is a mutual fund that trades on the exchange. This should give you a basic idea:

What is an ETF and how does it work?

Edelweiss is set to launch a debt ETF that will only hold bonds issued by public sector undertaking (PSUs). Before I explain more about the ETFs, a few basics. What is an ETF? An ETF or exchange traded fund is a mutual fund that trades on the exchange just like a stock. Most ETFs are passive ETFs and they replicate an index. For example, a Nifty 50 ETF holds the shares in it But the key difference is how ETF units are created. When you invest in mutual funds, the AMC collects orders till 2 PM…

@shiiromani

I mean ETF dont have any expense ratio

Of course they do but they are cheaper than equivalent mutual funds.

@shiiromani

everyone knows Index fund are better than most mutual funds then why people dont buy the ETFs which provides more liquidity and lower expenses (few more question might come after getting the answers

It depends on the duration of a trade. If you want to express a short-term view or do tactical trading, then ETFs make more sense than index funds because they don’t have any exit loads. You can get in and out of an ETF just like you would a stock.

Having said that, not all ETFs are liquid in India and these are still early days for ETFs in India.