What is an ETF?
An ETF (Exchange-Traded Fund) holds a basket of securities - stocks tracking an index, gold, silver, or bonds - just like a mutual fund does. The structural difference is how you buy and sell it: a regular mutual fund is bought and sold directly with the AMC, once a day, at that day’s NAV. An ETF is listed on the exchange (NSE) and trades continuously during market hours, with its own live price that can move away from NAV between the daily NAV calculations - see iNAV and premium/discount to NAV for how that gap is measured.
Because an ETF trades like a stock, you need a demat and trading account to buy one - you can’t buy it directly from the AMC the way you can a regular mutual fund scheme. You also pay brokerage and bid-ask spread on each trade, costs a direct mutual fund purchase doesn’t carry, though ETFs typically have a lower expense ratio to offset that.
Real category breakdown, 354 NSE-listed ETFs
CHART
ETFs tracked on Punji by category
354 active NSE-listed ETFs as of 2026-10-29, grouped by AMFI's ETF category. Sectoral/Thematic and Large Cap index ETFs dominate by count.
Browse the full breakdown on the ETF directory.
How to use it in practice
An ETF and an index fund tracking the same benchmark should deliver near-identical returns before costs - the real decision is about transaction mechanics, not performance. An ETF suits someone who already has a demat account, wants intraday liquidity, or is comparing the live premium/discount before buying. A regular index fund suits someone running an SIP, since ETFs don’t support a true SIP the way a mutual fund folio does (you’d need to place a manual buy order each month).
Common mistakes
The most common ETF mistake is placing a market order without checking iNAV first, especially in a thinly traded ETF - you can end up paying a meaningfully higher price than the fund’s actual NAV. Gold and Silver ETFs are not identical to owning physical gold or silver either: they carry a (usually small) expense ratio and trade at their own premium/discount, unlike a locker full of coins.
Frequently asked questions
Is an ETF the same as an index fund?
Not quite. Both typically track an index, but an index fund is a regular mutual fund scheme (bought/sold once daily at NAV through the AMC); an ETF trades on the exchange with a live price throughout the day.
Do ETFs pay dividends?
Most Indian equity and gold/silver ETFs reinvest the underlying income rather than paying it out, though this depends on the specific scheme’s structure - check the scheme’s own disclosures.
Can I do an SIP in an ETF?
Not a true SIP through the AMC the way you can with a regular fund. Some brokers offer a manual recurring-order feature that approximates one, but each purchase is still a separate market trade with its own brokerage and bid-ask cost.
WHAT THIS MEANS FOR YOU A thinly traded ETF can have a wide bid-ask spread and a persistent premium or discount to NAV - check an ETF’s own page for its typical premium/discount range before assuming the quoted price reflects fair value, especially for less-liquid sectoral or international ETFs.
METHODOLOGY Category counts from Punji’s NSE-listed ETF data, active rows only, as of 2026-10-29. Data: NSE, AMFI. Not investment advice.