ETF (Exchange Traded Funds) Discount Screener – Explained

1) What is an ETF (Exchange Traded Fund)?
An ETF is a basket of securities that tracks an underlying asset, like Gold, Silver, or the Nifty 50. Unlike Mutual Funds, ETFs trade like regular stocks on the NSE and BSE. When you buy a Gold or Silver ETF, the fund house (AMC) actually buys physical metal and stores it in secure vaults, allowing you to own bullion in digital form without storage costs or safety concerns.

2) What is NAV (Intraday Net Asset Value)?
NAV is the “Fair Value” of one unit of the ETF calculated in real-time during market hours. It is the most critical metric in our tracker. It represents the actual value of the underlying gold or silver held by the fund at that exact moment. While the market price (LTP) is driven by supply and demand, the iNAV is driven by the physical spot price of the metal.

3) What is Discount % in the ETF Tracker?
The Discount % shows the gap between the ETF’s Market Price (LTP) and its iNAV.

• Negative % (Discount): You are buying gold or silver for less than its actual market worth.
• Positive % (Premium): You are overpaying compared to the fair value of the metal. Our screener flags high discounts, allowing you to acquire gold/silver at a “wholesale” price not available to the general public.

4) Why does the Discount/Premium happen?
In a perfect market, the LTP should equal the iNAV. However, if many investors sell their units simultaneously (Selling Pressure), the LTP can drop below the iNAV, creating a Discount. Conversely, if there is a sudden rush to buy and the AMC cannot create new units fast enough, the LTP rises above the fair value, creating a Premium.

5) What is Tracking Error?
Tracking error measures how accurately the ETF follows the price of its underlying asset (e.g., Gold). Even if Gold goes up 10%, an ETF might only go up 9.5% due to the Expense Ratio, cash holdings, or storage costs. A lower tracking error indicates a more efficiently managed fund. Our analyzer helps you pick funds that mirror the metal’s performance most closely.

6) What is the “Impact Cost” and why does Volume matter?
Liquidity is king in ETFs. If an ETF has low trading volume, you might see a wide “Bid-Ask Spread” (the difference between the price you buy at and the price you can sell at). A high Volume (as seen in GOLDBEES or SILVERBEES) ensures you can enter and exit large positions instantly without “slippage”—where the act of your buying/selling moves the price against you.

7) Taxation on Gold & Silver ETFs (2026 Rules): Unlike SGBs, Gold and Silver ETFs do not have a tax-free maturity. As per current 2026 regulations, gains from these ETFs are treated as Long-Term Capital Gains (LTCG) if held for more than 12 months and are taxed at 12.5%. If held for less than a year, they are treated as Short-Term Capital Gains (STCG) and taxed at your applicable income tax slab.

8) How to use the “52W Range%” in the tracker?
This metric indicates where the current price sits relative to its highest and lowest points over the last year. A value of 100% means the ETF is at an all-time high, while 0% means it is at its yearly low. Investors often look for ETFs with a low 52W Range% combined with a high Discount % to find undervalued entry points.

9) SGB vs. Gold ETF: Which should I buy?

• Buy SGBs if you want a fixed 2.5% extra income and plan to hold for the long term (8 years) to enjoy tax-free maturity.
• Buy Gold ETFs if you need high liquidity (the ability to sell instantly), want to trade intraday, or wish to use the units as collateral (Margin) for trading other segments.

10) Why use “Limit Orders” only?
Never use “Market Orders” when trading ETFs, especially during high volatility. A market order will hit the best available “Ask,” which might be at a significant premium to the iNAV. Always check our tracker’s Discount % and place a Limit Order close to the iNAV to ensure you aren’t overpaying just to get an execution.