Opening a Demat account is the first step to begin investing in Exchange Traded Funds (ETFs) or shares. The process today is fully digital and can be completed in less than two days with most brokers. Once your account is active, you can start buying ETFs directly from the stock market, just like any other listed share.
How To Open A Demat Account And Start Buying ETFs?
To begin, choose a SEBI-registered broker or financial institution of your choice. Popular online platforms simplify the entire process — from KYC verification to e-signature — making it convenient and paperless. After submission, it usually takes about 48 hours for your account to get activated.
Once your Demat account is live, you can access the exchange through your broker’s app or website. For those tracking index-based investing, studying our Nifty Tip and BankNifty Tip sections offers practical trading insights aligned with Indian benchmarks.
What Are ETFs And Why Are They Popular?
Exchange Traded Funds are investment instruments that replicate an index, such as the NIFTY 50 or SENSEX, and are traded on exchanges throughout the day. They combine the diversification of mutual funds with the flexibility of stock trading. ETFs allow investors to take broad market exposure at relatively low cost.
Investors looking to align ETF purchases with derivatives or short-term strategies can also refer to Option Tip for in-depth guidance and further market analysis through SEBI Advisory.
Which ETFs Are The Most Traded?
In India, some of the most actively traded ETFs tracking the NIFTY 50 index include SBI ETF NIFTY 50, ICICI Prudential NIFTY 50 ETF, Axis NIFTY 50 ETF, and Mirae Asset NIFTY 50 ETF. These funds generally mirror the performance of the index, with only small deviations caused by demand-supply differences or temporary tracking errors.
Why ETFs Trade At Slight Premiums
ETFs sometimes trade at a small premium or discount to their underlying index value. While some investors attribute this to dividend adjustments, the real reason usually lies in market liquidity and investor sentiment. During sharp rallies or sell-offs, ETF prices can momentarily move slower than the index itself.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, highlights that ETFs are one of the most efficient tools for retail investors to gain diversified exposure to large-cap Indian equities. He advises new investors to start with broad index ETFs and focus on liquidity and long-term compounding rather than short-term price premiums.
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment adviser before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
