TYPES OF ETFS AVAILABLE IN INDIA
The Indian ETF market has expanded significantly, offering a variety of ETFs to cater to different investment preferences and goals. Here are the main types of ETFs you can invest in:
Equity ETFs:
These ETFs track stock indices like the Nifty 50, BSE Sensex, or sector-specific indices such as Nifty Bank. They provide exposure to a broad market or specific sectors, making them ideal for investors looking for equity exposure with diversification.
Example:
The Nifty 50 ETF replicates the performance of the Nifty 50 Index, allowing investors to own a diversified portfolio of the top 50 companies in India.
Debt ETFs:
These ETFs invest in fixed-income securities like government bonds, corporate bonds, or money market instruments. They are suitable for investors seeking stable returns with lower risk.
Example:
The Bharat Bond ETF, which invests in high-quality corporate bonds issued by public sector companies, offers a low-cost way to invest in a diversified portfolio of bonds.
Gold ETFs & Silver ETFs:
These ETFs aim to track the price of gold and silver. They provide a convenient way for investors to gain exposure to gold without the need to buy and store physical gold and silver.
Example:
The HDFC Gold ETF invests in gold bullion and tracks the price of gold in the domestic market, providing a hedge against inflation and currency fluctuations.
International ETFs:
These ETFs provide exposure to international markets by tracking global indices or specific foreign markets. They help investors diversify their portfolios geographically.
Example:
The Motilal Oswal NASDAQ 100 ETF replicates the performance of the NASDAQ 100 Index in the US, allowing investors to gain exposure to leading technology companies like Apple, Amazon, and Google.
Sector and Thematic ETFs:
These ETFs focus on specific sectors such as banking, IT, or investment themes like ESG (Environmental, Social, and Governance). They are designed for investors who have a strong view on particular sectors or investment themes.
Example:
The ICICI Prudential IT ETF invests in IT companies listed on the NSE, making it ideal for investors who are bullish on the Indian IT sector.