Mirae Asset S&P 500 Top 50 ETF: Price Gaps, Liquidity Issues, and Arbitrage for Indian Investors

Introduction

If you’ve ever looked at an ETF like the Mirae Asset S&P 500 Top 50 ETF and wondered how it works, you’re not alone.

I remember staring at my trading app, confused about why an ETF tracking US stocks was moving during Indian market hours.

The US stock market is closed during Indian trading hours, right? So the underlying US stocks aren’t trading (moving). Yet, the ETF’s price on the Indian exchange keeps changing. How?

It can feel like a puzzle. Today, in this post I’ll try to answer this puzzle.

I’ll start with how these ETFs function and why their prices move when US markets are closed.

I’ll also talk about whether they open doors for arbitrage. Arbitrage means buying and selling say, a ETF or a stock, at different prices to make a profit, and I’ll explain if this US focused ETF allows such opportunities for Indian traders.

What Is an ETF

An Exchange-Traded Fund (ETF) is like a basket – very much like a mutual fund.

It holds a bunch of stocks, bonds, or other assets. You buy a single unit of the ETF, and you get exposure to all those assets.

Think of it as ordering a thali, you get a bit of everything without buying each dish separately.

The Mirae Asset S&P 500 Top 50 ETF tracks the S&P 500 Top 50 Index. This index includes the top 50 companies in the US, like Apple, Microsoft, and NVIDIA.

I think, if you want to deeply understand what is an ETF, comparing it with mutual fund and an individual stock will give you a very clear perspective about it.

Feature	Mutual Fund Scheme	Individual Stocks	ETF
What You Own	Units of a fund holding multiple assets	Direct shares of a single company	Units of a fund tracking an index – like mutual funds.
Trading	Bought/sold at NAV, end of day	Traded on exchange, real-time	Traded on exchange, real-time (like stocks)
Management	Actively/passively managed	No management, investor decides	Passively managed, tracks index – like mutual funds.
Diversification	High, holds many assets	Low, single company exposure	High, tracks index with many stocks – like mutual funds
Cost	Higher fees (expense ratio)	Brokerage fees only	Lower fees than mutual funds – like index funds.
Liquidity	Limited, depends on fund house	High, depends on stock volume	High, depends on exchange volume – like stocks,

So you can see, an ETF is mostly like a mutual fund but with some good qualities of stocks as well.

Why Does the US ETF Price Move During Indian Hours?

This is where things get interesting.

The US stock market opens only in the evening IST.

So, when we’re trading in India during the day, those US stocks aren’t trading (not moving). Why? Because at our trading hours, the stock market in the US is closed.

Yet, the ETF’s price on the NSE keeps fluctuating, even during Indian trading hours. Why? This is the main question.

It is due to local market dynamics. Let me explain.

The price of such US focused ETF’s price in India can change due to supply and demand. During Indian trading hours, Indian investors are buying and selling these ETF units, right?

Their sentiment, expectations, and even the INR/USD exchange rate play a role. If more people want to buy than sell, the price goes up. If sellers dominate, it dips.

This creates a gap. What GAP?

The gap is the difference between the ETF’s trading price on the Indian stock exchange (like NSE) and its NAV.

• The NAV is the actual value of the underlying US stocks held by the ETF. It is calculated based on their closing prices in the US market, adjusted for the INR/USD exchange rate.
• During Indian trading hours, when US markets are closed, the ETF’s price in India is fluctuate. Why? Due to local demand, supply, and investor sentiment. This can push the ETF’s price higher (premium) or lower (discount) than the actual NAV of the fund.

This is how the gap between the actual NAV and the ETF’s price gets created.

When You Buy the ETF Units, Are You Really Buying the US Stocks?

It is a common question: When you buy this ETF, do you own shares of Apple or Microsoft?

Not really. You’re buying units of the ETF. The fund itself holds those US stocks. You get indirect exposure to them.

It’s same like buying a mutual fund units.

An investor buys only the units of mutual fund scheme. The mutual fund holds a basket of stocks in its portfolio. What unit holders own are only units and not the stocks.

It is same like buying shares of a company. What shareholders own are only stocks (right to a share in company’s profits). They do not own the assets of the company like land, building, machines, inventory, etc. Yes, a majority shareholder can have different kind of rights.

ETFs trade on the stock exchange like regular stocks. You can buy or sell them anytime during market hours. This makes them flexible.

But you don’t directly own the underlying stocks. The ETF’s managers handle that for you.

For example, as of August 2025, the Mirae Asset S&P 500 Top 50 ETF has the following holding patters:

• NVIDIA at 12.08%,
• Microsoft at 11.59%, and
• Apple at 9.61% as its top holdings.

The Liquidity Question – Why No Sellers in ETF?

Let’s talk about something specific to this ETF. A person asked this on reddit.

On August 7, 2025, the Mirae Asset S&P 500 Top 50 ETF was trading at Rs.62.55 on the NSE. The volume was around 663,700 shares. Not bad, but not massive either.

Some investors complain about low liquidity. They see no sellers or a wide bid-ask spread.

What was going on? Liquidity depends on market makers and retail participation.

• Market makers are like shopkeepers. They ensure there’s always someone to buy or sell from. But for international ETFs in India, market maker activity can be low.
• Retail investors might also shy away if they don’t understand the ETF well.

This can lead to an order book imbalance.

A wide bid-ask spread means the difference between what buyers offer (buy price) and sellers ask (ask price) is high.

It’s like bargaining at a market stall with no middle ground.

Remember, an ETF’s liquidity can be low if only few people are trading it or market makers aren’t active. This can lead to fewer buyers or sellers. This doesn’t mean you can’t buy or sell. It only means that it might take longer time to get the trade executed.

If you want to get the trade done quickly, try placing the limit order closer to the last traded price.

The Arbitrage Opportunity – Due to the Gap

What is the gap? Read it again here and then continue reading.

Now, let’s address this big question. Again, I got this follow-up query from the same reddit user.

Does this premium or discount create arbitrage opportunities? Absolutely, it can.

Arbitrage is like spotting a deal at two different stores. It happens when you buy something at a lower price in one place and sell it at a higher price elsewhere to make a profit. For example, you could buy an iPhone for Rs.100,000 on Amazon and sell it for Rs.105,000 on Flipkart. The Rs.5,000 difference is your profit, but costs like shipping or taxes might reduce it.

So how arbitrage opportunity gets created in an ETF like “Mirae Asset S&P 500 Top 50?”

If the ETF’s price in India is higher than the value of its US stocks, you could sell the ETF and buy the stocks (or their futures) in the US market.

When the prices align, you pocket the difference.

Sounds simple, right? But its harder than it sounds.

Arbitrage isn’t a free lunch. Transaction costs eat into profits. You’re paying brokerage fees, taxes, and maybe currency conversion charges.

The INR/USD exchange rate can also swing unexpectedly. Plus, low liquidity in the Indian market makes it tricky to execute trades smoothly.

Professional traders with high-speed systems and deep pockets often dominate arbitrage. For retail investors like us, it’s tougher.

But the possibility exists, especially during volatile Indian trading hours.

Tips for Trading This ETF

Here are a few pointers to navigate this ETF better:

• Check the NAV: Compare the ETF’s price to its NAV on the fund’s website. This helps spot premiums or discounts.
• Watch the Spread: A wide bid-ask spread signals low liquidity. Use limit orders to avoid overpaying.
• Track Currency Movements: INR/USD fluctuations impact your returns. Stay updated.
• Time Your Trades: Prices can be volatile during Indian hours. Trading closer to US market opening might align prices better.

Conclusion

I’ve always believed diversification is key.

The Mirae Asset S&P 500 Top 50 ETF offers a solid way to tap into US markets without the hassle of opening a foreign trading account.

But it’s not perfect. Low liquidity and currency risks can be annoying.

Still, if you’re patient and strategic, it’s a great tool for long-term wealth creation through portfolio diversification.

What do you think? Are you ready to add some global flair to your portfolio? Or does the idea of tracking NAVs and spreads feel like too much work? Drop your thoughts in the comments.

Have a happy investing.