Understanding the Types of ETFs
ETFs aren’t just for the Nifty — there are equity, debt, gold and international varieties. Here’s the landscape.
On this page
An ETF (Exchange Traded Fund) trades on the exchange like a stock but holds a basket of assets, usually tracking an index. Beyond the familiar Nifty ETF, there’s a whole range — here’s the map. Browse them on our ETFs hub.
Equity ETFs
- Index ETFs — track broad indices like the Nifty 50 or Sensex (see index funds for the non-demat equivalent).
- Sectoral/thematic ETFs — track a sector (banking, IT) or theme.
- Factor/smart-beta ETFs — track rule-based strategies (low-volatility, momentum, value).
Debt ETFs
- Track bond indices — e.g. government securities, PSU bonds or target-maturity bond indices — giving low-cost fixed-income exposure that trades on the exchange.
Gold and commodity ETFs
- Gold ETFs track the gold price, held in demat — a convenient way to own gold without physical storage. Silver ETFs exist too.
International ETFs
- Track overseas indices (like the Nasdaq 100), giving global exposure — though availability and inflow limits can vary.
Why ETFs appeal
- Low cost — passive ETFs have low expense ratios.
- Liquidity & transparency — trade any time the market is open; holdings are known.
- Diversification in a single unit.
Points to note
- You need a demat account to buy ETFs.
- Watch liquidity and the price-vs-NAV gap in thinly-traded ETFs.
- For automated SIPs without demat, an equivalent index fund may be simpler.
ETFs are versatile, low-cost building blocks across asset classes. See what is an ETF. Education only, not a recommendation.
