Key metrics
| Factor | ETFs | Mutual Funds |
|---|---|---|
| Expense ratio | 0.05% – 0.30% | 1.2% – 2.0% |
| Transparency | Holdings daily | Holdings monthly |
| Execution | Live trading on exchange | End-of-day NAV |
| Minimum investment | 1 unit (~₹100-₹200) | ₹500 SIP / ₹5,000 lump sum typical |
| Taxation | Same as equity mutual funds | Depends on fund; equity vs debt rules |
Pros & cons snapshot
ETF Advantages
- Ultra-low fees
- Instant liquidity
- Perfect for automation
ETF Watchouts
- Need demat/broker
- Bid-ask spread on illiquid ETFs
Mutual Fund Advantages
- No demat needed
- SIP auto-debit via bank
Mutual Fund Watchouts
- Higher fees
- Possible exit loads
Where SmartETF adds value
We use ETFs as the base because of their low cost and transparency, then layer:
- Dip-multiplier purchases to capture market crashes
- Volatility guard to prevent buying in overheated phases
- Broker automation + dashboard reporting