I bought units in a smaller ETF once, assuming exiting would be as easy as buying. Months later, the best bid available was meaningfully below the ETF’s actual value — my first real lesson in liquidity, learned the expensive way.
The real difference between ETFs and index funds, how expense ratios quietly affect long-term returns, and the liquidity considerations I wish I’d understood before that first trade.
ETFs and index funds are often sold as “set and forget,” but a few practical details — like the one that caught me out — genuinely matter. This section covers those details honestly, not just the marketing pitch.
In March 2024, I put ₹15,000 into a Nifty 50 ETF through my Zerodha account, expecting it to behave more or less like the index mutual fund I already had. It didn’t, not exactly. The order filled at ₹1 above the price I’d seen ten seconds earlier, the units showed up in my demat holdings … Read more
In June 2023, I bought 500 units of a Nifty IT-sector ETF not the most popular one, a smaller AMC’s version at around ₹42 a unit through Zerodha Kite, roughly ₹21,000 total. Five months later, when I wanted to exit, the best bid sitting on the order book was ₹40.20, nearly 4% below the ETF’s … Read more
I bought units in a smaller ETF once, assuming exiting would be as easy as buying. Months later, the best bid available was meaningfully below the ETF’s actual value — my first real lesson in liquidity, learned the expensive way.
The real difference between ETFs and index funds, how expense ratios quietly affect long-term returns, and the liquidity considerations I wish I’d understood before that first trade.
ETFs and index funds are often sold as “set and forget,” but a few practical details — like the one that caught me out — genuinely matter. This section covers those details honestly, not just the marketing pitch.