Zerodha ETF List and How to Invest

Let's dive into the world of ETFs with Zerodha. Zerodha offers a wide range of ETFs from various categories, including equity, debt, and gold.

Zerodha's ETF list is extensive, with over 200 ETFs to choose from. This variety allows investors to diversify their portfolios and invest in different asset classes.

To invest in Zerodha ETFs, you'll need to open a trading account with them. This can be done online or through their mobile app, Kite.

An exchange-traded fund, or ETF, is a basket of securities that trades throughout the day on the stock exchanges, just like a stock.

You can buy and sell an ETF anytime you want, making it a flexible investment option.

Unlike a mutual fund, an ETF doesn't have a fixed trading time, allowing you to respond quickly to market changes.

An ETF can track a specific index, such as the Nifty 50 index, giving you exposure to a broad range of stocks with just one investment.

Searching for "Nifty ETF" on Kite will show you a list of all ETFs that track the Nifty 50 index, making it easy to find the right investment for you.

You can trade ETFs through the Kite Web and Kite Mobile platforms offered by Zerodha, which are user-friendly and provide real-time market data.

The Kite Web platform offers advanced trading features, including charting tools and technical analysis indicators, to help you make informed decisions.

You can also use the Kite Mobile app to trade ETFs on the go, with features like push notifications and order tracking to stay updated on your trades.

Market price is determined by demand, supply, and trading activity on the exchanges.

You'll see the ETF market price on your trading platform, but how do you know if it's the fair price? The Net Asset Value (NAV) serves as a reference point.

The NAV is calculated by looking at the last traded price of all securities in the ETF basket, plus the cash component, divided by the total ETF shares in the creation basket.

The NAV is a key metric to understand the true value of an ETF, and it's essential to compare it with the current market price on the stock exchanges.

The NAV is calculated every 10-15 seconds and published on the AMC's website, giving you a real-time reference point. This is known as the indicative or intraday NAV (iNAV).

The iNAV is calculated using the same formula as the NAV, but it's updated in real-time to reflect the current market conditions. This allows you to use it as a fair value reference to compare with the current market price.

Market makers and authorized participants (APs) play a crucial role in the ETF ecosystem by providing liquidity on the stock exchanges.

Market makers are typically large brokers in India, appointed by the AMC to provide continuous two-way quotes on the exchange, buying at the bid and selling at the offer.

The creation size of an ETF is a key factor in determining the role of market makers. For example, the ICICI Nifty 50 ETF's creation size is roughly 80 lakhs, which means that if you're investing in multiples of 80 lakhs, you can directly contact ICICI to create units.

Market makers make a profit by buying at the bid and selling at the offer, with the difference being their profit. Even though these are small amounts, it tends to add up since they keep doing this continuously.

During volatile market phases, market makers can make a significant profit by buying or selling ETF units at a premium or discount to the NAV. For instance, during the COVID crash in 2020, popular ETFs like NiftyBeEs and SBI Nifty 50 ETF experienced wide premiums and discounts.

Authorized participants (APs) buy or sell the underlying securities that make up the ETF creation unit to maintain the balance between the ETF's price and its NAV. They then give these securities to the AMC, which creates ETF shares that are sold on the exchange.

Always use limit orders, it's a crucial aspect of trading. This is especially important when buying an ETF.

Placing a market order for 200 units of the Aditya Birla Sun Life Nifty Next 50 ETF would result in your order being executed at prices starting from Rs 350, which is above the LTP.

This can lead to a significant increase in cost, as seen in the example where the order was finally executed at Rs 374, that's 8.7% higher than the LTP.

Zerodha ETFs offer a range of options for investors, including the Zerodha Gold ETF and the Zerodha Nifty 100 ETF.

The Zerodha Gold ETF allows investors to gain exposure to gold without physically holding the metal, making it a convenient option for those looking to diversify their portfolio.

The Zerodha Nifty 100 ETF tracks the Nifty 100 Index, providing a broad representation of the Indian stock market.

These ETFs are designed to be low-cost and easy to trade, making them a great option for investors of all levels.

ETFs in India have been around for a while, but they haven't really caught on with retail investors yet.

The largest mutual fund in India is the SBI Nifty 50 ETF with an AUM of Rs 89,441.55 cr, mostly due to the EPFO's investment.

ETFs have mostly been used by HNIs and institutions, with the EPFO investing in Nifty and Sensex ETFs, and the government divesting through CPSE ETF and Bharat 22 ETF.

The government has also introduced Bharat Bond Debt ETFs, which have seen significant growth.

Retail participation in ETFs has been growing steadily over the years, with 32.2 lakh investors making transactions in CY20, a 200% jump from CY19.

However, the AUM of NiftyBeES, a 20-year-old ETF, is only around Rs 2800 cr, highlighting the under-penetration of ETFs in India.

There are several reasons for this, including the small market size, limited awareness, and lack of commission-based sales like mutual funds.

Zerodha offers a range of ETFs that cater to different investment goals and risk profiles.

One notable ETF is the Zerodha Gold ETF, which allows investors to invest in gold, a traditional safe-haven asset.

The Zerodha Nifty 100 ETF tracks the Nifty 100 index, providing exposure to the top 100 companies listed on the National Stock Exchange.

Investors can also opt for the Zerodha Nifty 1D Rate Liquid ETF Growth, which is a liquid ETF that offers high liquidity and low risk.

Zerodha also offers an ELSS Tax Saver Nifty Largemidcap 250 Index Fund Direct Plan Growth, which allows investors to save tax while investing in the stock market.

The Zerodha Nifty Largemidcap 250 Index Fund Direct Plan Growth is another index fund offered by Zerodha, providing exposure to the large and mid-cap segment of the Indian stock market.