Diversify your portfolio easily with top-performing ETFs on Groww

An Exchange Traded Fund (ETF) is a type of investment fund that holds a collection of assets such as stocks, bonds, or commodities. ETFs trade on stock exchanges, just like individual shares, and their prices fluctuate throughout the trading day.

ETFs track the performance of a specific index, sector, commodity, or asset class. When you invest in an ETF, you’re essentially investing in all the underlying assets that the ETF represents—providing instant diversification.

While both offer diversification, ETFs trade on the stock exchange in real time like shares, whereas mutual funds are bought and sold only at the end of the trading day. ETFs also generally have lower expense ratios compared to mutual funds.

ETFs offer diversification, liquidity, lower costs, transparency, and flexibility. They’re an efficient way to invest in a basket of securities and manage risk through a single investment.

Yes, ETFs are considered beginner-friendly because they provide exposure to a wide range of assets without requiring you to pick individual stocks. They’re also easy to buy and sell through your trading account.

There are various types of ETFs, including:

• Equity ETFs (track stock market indices)
• Bond ETFs (invest in fixed-income securities)
• Sector or Thematic ETFs (focus on industries like technology or healthcare)
• Commodity ETFs (track assets like gold or oil)
• International ETFs (provide exposure to global markets)

You can invest in ETFs on Groww by searching for your preferred ETF, reviewing its details such as past performance, expense ratio, and holdings, and then purchasing units directly—just like buying a stock.

Like all investments, ETFs carry risks. Their value can fluctuate due to market volatility, sector performance, or tracking errors. It’s important to review the ETF’s objective, composition, and historical data before investing.