InvestorQ : Are these exchange traded funds some kind of futures trading? Like are the Nifty ETFs the same as buying a Nifty futures contract?
Swati Naik made post

Are these exchange traded funds some kind of futures trading? Like are the Nifty ETFs the same as buying a Nifty futures contract?

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Bhavika Nehru answered.
2 years ago
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Even though ETFs and Futures allow investors exposure to an index, they are different in many regards. While Futures is a derivative product and trades in the F&O segment of NSE, ETFs are a cash market product and trade in the Capital Market segment of NSE. The maximum tenure available for futures is 3 months in the Indian context while ETFs can be held for as long as the investor wants. Holding Nifty ETF is just like holding Nifty in spot format in your demat account. Your returns are not leveraged but move along with the Nifty in the ratio of 1:1.

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