Yes, just like stock and Mutual funds ETF are regulated by SEBI. SEBI can issue guidelines related to ETFs from time to time in India.

ETFs do not require you to own any equities. The securities in a mutual fund's basket are owned by the fund. Stocks entail physical possession of the asset. ETFs, diversify risk by monitoring multiple companies in a single area or industry.

Not exactly, although this is a common misconception. ETFs are baskets of stocks or securities, but although this means that they are generally well diversified, some ETFs invest in very risky sectors or that employ higher-risk strategies, such as leverage. So it completely depends on the construct of the ETF.

Most times when people discuss ETFs' cost advantage, they're comparing ETFs with the broad universe of mutual funds. But ETFs tend to be cheaper than mutual funds generally because ETFs mostly follow a less expensive indexing strategy.

ETF Creation and Redemption is the mechanism through which the supply of shares is regulated. The investors who are involved in creation and redemption are known as authorized participants.

A derivative-based ETF is a special type of financial security whose value is based upon that of another asset.

ETFs have a very transparent portfolio holding and predefined creation baskets. This allows arbitrageurs to create and redeem units every day through the in-kind creation/redemption mechanism. Such arbitrageurs are always in the market to take advantage of any significant premium or discount between the ETF market price and its NAV by doing arbitrage between the ETF and its underlying portfolio. Thus, the open architecture of ETFs ensures that there is no significant premium or discount to NAV. At the same time, additional demand/supply is absorbed due to the action of the arbitrageurs.

When an ETF issuer wants to create new shares of an ETF, it goes to an Authorized Participant (AP). An AP may be a market maker or a large financial institution. The AP goes into the market and buys the underlying securities the ETF has to hold and delivers those securities to the ETF issuer. In return, the issuer gives the AP a block of ETF shares that can be sold in the open market

Systematic Investment Plans (SIP) are a favored tool among retail investors in India. Yet, one of the retail investor-friendly products, ETFs, doesn't have the traditional SIP route open through manufacturers. But the SIP in ETF can be coordinated through the same way a share is traded through a Demat account, traded by units.

An all-in-one ETF invests in multiple ETFs that can be both actively and passively managed to provide a simple, low-cost way to create a diversified portfolio.

An ETF is similar to a mutual fund in that it offers investors a proportionate share in a pool of stocks, bonds, and other assets. It is most commonly structured as an open-end investment company, as are mutual funds, and is governed by the same regulations.

ETFs trades just like stocks, and you can buy or sell anytime during the trading day. For long-term investors, these features don't matter.

If you hold ETF shares for one year or less, then the gain is known as a short-term capital gain. Long-term capital gain is attained when you hold ETF shares for more than one year.

Tracking error is an indicator that shows how actively a fund is managed as well as the difference in its actual performance between a position and its corresponding benchmark.

Since ETFs, like stocks, are bought as shares through a broker, every time an investor makes a purchase, he/she pays a brokerage commission. In addition, an investor can suffer the usual costs of trading stocks, including differences in the ask-bid spread, etc. Of course, traditional Mutual Fund investors are also subjected to the same trading costs indirectly, as the Fund in turn pays for these costs.

Buying/Selling ETFs is as easy as buying/selling any other stock on the exchange. ETFs allow investors to take advantage of intraday movements in the market, which is not possible with open-ended Funds. With ETFs, one pays lower management fees. As ETFs are listed on the Exchange, distribution and other operational expenses are significantly lower, making it cost-effective. These savings in cost are passed on to the investor. ETFs have lower tracking errors due to their characteristics of creation and redemption. Due to its unique structure, long-term investors are insulated from short-term trading in the fund.

ETFs, carry with them certain costs and fees which affect the funds' returns. An investor should incorporate these costs while calculating their desired rate of return. The major costs associated with ETFs are: Expense Ratios:- The net expense ratio includes waivers, reimbursements, and trading costs, whereas the Gross expense ratio is equal to the percentage of total mutual fund assets used to run the fund. The expense ratio is a measure of the annual fund operating expenses of an investment fund. It is expressed as a percentage of the funds' Assets Under Management (AUM). The funds' operating expenses include spending on administration, management, and advertising. The expense ratios for ETFs range from 0.1% to 0.7% per annum which includes all the fees the fund house is charging. Brokerage, STT, and Other Charges:- Your broker also charges certain fees for its services, called brokerage charges. The average brokerage charge on purchasing ETFs is 0.01% of the turnover value. Apart from that, STT stands for Securities Transactions Tax and is a fee levied by SEBI. It stands at 0.01% of your turnover value. Demat Transaction Charges range from Rs. 15-40 depending on your broker and his Depository Participant. 18% GST is also charged by the Government of India on brokerage + transaction charges. Overall, the net charges stand close to 0.5-1.0% of your total Assets Under Management (AUM).