Negative impactStocks
US ETF frenzy: Why Indians are paying ₹150 for ₹100 of assets, and what to do instead
Mint 1 hr ago·23 Sept 2026, 5:02 pm
Indian investors are currently facing a challenging environment for Exchange Traded Funds (ETFs). A surge in demand for US-listed ETFs has led to a significant premium, where investors are paying more than the actual value of the assets they are buying. This price gap has widened to as much as 50%, meaning a ₹100 investment might only secure ₹50 worth of underlying stocks. Consequently, these funds have experienced sharp declines in value, eroding the returns of those who bought at the peak.
This situation is driven by a limited supply of these specific ETFs, which has created a classic supply-and-demand imbalance. For retail investors, this volatility poses a risk, as the price paid does not always reflect the true worth of the assets. It is crucial to understand that these premiums are not sustainable and can reverse quickly, leading to losses. Monitoring liquidity and avoiding purchases at extreme premiums are key steps to protect your capital in this market.
Excerpt from Mint
Indian ETFs faced a tumultuous week, with some trading at steep premiums and experiencing sharp declines. Experts warn that limited supply amidst high demand creates risks for investors India’s international ETF segment has had a roller-coaster week, with some US-focused ETFs trading at steep premiums to their…Read the original at Mint
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- Category: Stocks.
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