15 Best ETFs in India To Invest in 2024 (2024)

Investing in Exchange-Traded Funds (ETFs) has become increasingly popular among stock market investors in India. With many options available, choosing the ETF can be overwhelming. This article delves into the 15 Best ETFs in India, providing a detailed overview, advantages, comparison with mutual funds, investment strategies, and tax implications to help you make informed investment decisions.

What is ETFs?

Exchange-traded funds (ETFs) are investment funds traded on stock exchanges like individual stocks. These funds typically hold a diversified portfolio of assets such as stocks, bonds, gold commodities, or a combination thereof. They are designed to track the performance of a specific index, sector, commodity, or asset class.

One of the key features of ETFs is their structure, which allows investors to buy and sell shares throughout the trading day at market prices. This provides liquidity and flexibility to investors, allowing them to enter and exit positions easily. It also known for their low expense ratios compared to traditional mutual funds, making them a cost-effective investment option.

List of 15 Best ETFs in India

Here is the list of 15 Best ETFs in India. Click respectively to know more about them:

Overview of 15 Best ETFs in India

Here, a complete overview of 15 best ETF to invest, along with there Expense ratio, AUM, Market Cap, Risk, and Trend chart

1. Nippon India ETF Nifty 50 BeES

Nippon India ETF Nifty 50 BeES is one of the best etf to invest because it tracks the Nifty 50 index, which comprises the top 50 companies listed on the National Stock Exchange (NSE). By investing in NIFTYBEES, investors gain exposure to a diversified portfolio of blue-chip companies across various sectors of the Indian economy, making it a popular choice for broad market exposure.

• Fund Symbol: NIFTYBEES
• NAV: Rs 241.63
• Expense Ratio: 0.04%
• AUM: Rs 21,580 crore
• Market Cap: 22,606.36 Cr
• Volume: 20.49 Lakhs
• Risk: High risk
• Minimum lump sum investment: Rs.10,000

Returns:

2. Nippon India ETF PSU Bank BeES

Nippon India ETF PSU Bank BeES tracks the Nifty PSU Bank Index, offering exposure to stocks of public sector banks in India. Its appeal depends on individual investment goals and risk tolerance, with potential benefits of diversification across the PSU banking sector. However, like any investment, it carries risks, requiring careful consideration and consultation with a financial advisor before investing.

• Fund Symbol: PSUBNKBEES
• NAV: Rs 76.34
• Expense Ratio: 0.49%
• AUM: Rs 2,561 crore
• Market Cap: 2,640.14 Cr
• Volume: 42.97 Lakhs
• Risk: Very High risk
• Minimum lump sum investment: Rs.10,000

Returns:

3. ICICI Prudential Mutual Fund - BHARAT 22 ETF

BHARAT 22 ETF is considered one of the best etf to invest due to its diversified portfolio of blue-chip stocks from key sectors of the Indian economy. It offers investors exposure to well-established companies with strong growth potential and the benefits of diversification and liquidity that Exchange-traded funds provide.

• Fund Symbol: ICICIB22
• NAV: Rs 96.10
• Expense Ratio: 0.07%
• AUM: Rs.16,624 crore
• Market Cap: 16,519.94 Cr
• Volume: 7.58 Lakhs
• Risk: Very High risk
• Minimum lump sum investment: Rs 5,000

Returns:

4. Mirae Asset NYSE FANG+ ETF

Mirae Asset NYSE FANG+ ETF aims to mirror the NYSE® FANG+™ Index, encompassing top technology and tech-enabled firms like Facebook, Apple, Amazon, Netflix, and Google. It presents an opportunity for investors to tap into the growth potential of leading global tech giants. However, it's essential to note the associated risks, including market volatility and regulatory uncertainties, before investing.

• Fund Symbol: MAFANG
• NAV: Rs 83.55
• Expense Ratio: 0.66%
• AUM: Rs 2,046 crore
• Market Cap: 2,140.42 Cr
• Volume: 3.51 Lakhs
• Risk: Very High risk
• Minimum lump sum investment: Rs.5,000

Returns:

5. UTI S&P BSE Sensex ETF

UTI S&P BSE Sensex ETF aims to mirror the performance of the S&P BSE Sensex Index, comprising India's top 30 listed companies. This Exchange-traded funds offers investors a convenient way to gain exposure to the Indian equity market's blue-chip segment. While it provides diversification and potential for long-term capital growth, investors should assess market risks before investing.

• Fund Symbol: UTISENSETF
• NAV: Rs 784
• Expense Ratio: 0.05%
• AUM: Rs 36,897 crore
• Market Cap: 37,759 Cr
• Volume: 303
• Risk: Very High risk
• Minimum lump sum investment: Rs.5,000

Returns:

6. Nippon India ETF Gold BeES

Nippon India ETF Gold BeES (GOLDBEES) is a one of the best gold ETF to invest backed by physical gold, offering investors exposure to the price movements of gold without the need for physical ownership. By investing in GOLDBEES, investors can access the returns of gold bullion, considered a safe-haven asset and a hedge against inflation and currency depreciation.

• Fund Symbol: GOLDBEES
• NAV: Rs.55.54
• Expense Ratio: 0.79%
• AUM: Rs.8,929 crore
• Market Cap: 9,676.18 Cr
• Volume: 51.90 Lakhs
• Risk: High risk
• Minimum lump sum investment: Rs.10,000

Returns:

7. Nippon India Etf Nifty Bank Bees

Nippon India Etf Nifty Bank Bees (BANKBEES) tracks the Bank Nifty index, which comprises the most liquid and large-cap banking stocks listed on the NSE. This ETF offers investors exposure to India's banking sector, which is crucial to the country's economic growth. Investing in BANKBEES allows investors to capitalize on the performance of leading banks in India.

• Fund Symbol: BANKBEES
• NAV: Rs.471.90
• Expense Ratio: 0.19%
• AUM: Rs.6,120 crore
• Market Cap: 6074.77 Cr
• Volume: 5.91 Lakhs
• Risk: Very High risk
• Minimum lump sum investment: Rs.10,000

Returns:

8. HDFC Nifty50 Value 20 ETF

HDFC Nifty50 Value 20 ETF (HDFCVALUE) is a value-oriented Exchange-traded funds that aims to invest in stocks trading at a discount to their intrinsic value. Value investing focuses on identifying undervalued stocks with the potential for long-term capital appreciation. HDFCVALUE allows investors to benefit from the investment strategy of buying quality stocks at discounted prices.

• Fund Symbol: HDFCVALUE
• NAV: Rs.123.29
• Expense Ratio: 0.15%
• AUM: Rs.23 crore
• Market Cap: 25.62 Cr
• Volume: 0.06 Lakhs
• Risk: Very High risk
• Minimum lump sum investment: Rs.5,000

Returns:

9. Invesco India Gold ETF

Invesco India Gold ETF is one of the best Gold ETF, it is an investment fund that aims to track the price of gold in India. By investing in this Exchange-traded funds, investors gain exposure to the performance of gold without the need to physically own or store the precious metal. While it offers liquidity and potential for capital appreciation, investors should consider market risks and fluctuations in gold prices before investing.

• Fund Symbol: IVZINGOLD
• NAV: Rs.5852.88
• Expense Ratio: 0.55%
• AUM: Rs.97 crore
• Market Cap: 104.40 Cr
• Volume: 107
• Risk: High risk
• Minimum lump sum investment: Rs.5,000

Returns:

10. Nippon India Silver ETF

Similar to GOLDBEES, SILVERBEES is a silver ETF backed by physical silver. By investing in SILVERBEES, investors can gain exposure to the price movements of silver bullion, which is considered a valuable industrial and precious metal. SILVERBEES offers investors a convenient way to invest in silver without needing physical storage.

• Fund Symbol: SILVERBEES
• NAV: Rs.72.56
• Expense Ratio: 0.51%
• AUM: Rs.1,518 crore
• Market Cap: 1,621.04Cr
• Volume: 74.96 Lakhs
• Risk: Very High risk
• Minimum lump sum investment: Rs.1,000

Returns:

11. Kotak Nifty PSU Bank ETF

KOTAKPSUBK is one of the best ETFs in india which focuses on investing in public sector banks, providing investors with exposure to this banking industry segment. With the banking sector significantly contributing to India's economy, KOTAKPSUBK offers investors an opportunity to capitalize on the performance of PSU banks listed on the NSE.

• Fund Symbol: PSUBANK
• NAV: Rs.663.70
• Expense Ratio: 0.49%
• AUM: Rs.1,379 crore
• Market Cap: 1,401.80 Cr
• Volume: 3.73 Lakhs
• Risk: Very High risk
• Minimum lump sum investment: Rs.10,000

Returns:

12. HDFC Nifty100 Low Volatility 30 ETF

HDFC Nifty100 Low Volatility 30 ETF aims to invest in stocks with lower volatility, offering investors stability and potentially reducing downside risk. HDFCLOWVOL focuses on companies that exhibit lower price volatility than the broader market, making it suitable for investors seeking a defensive investment strategy.

• Fund Symbol: HDFCLOWVOL
• NAV: Rs.17.81
• Expense Ratio: 0.30%
• AUM: Rs.7 crore
• Market Cap: 26.81 Cr
• Volume: 0.09 Lakhs
• Risk: Very High risk
• Minimum lump sum investment: Rs.500

Returns:

13. Bharat Bond ETF - April 2030

Bharat Bond ETF - April 2030 offers similar benefits as its 2031 counterpart, providing investors with exposure to a diversified portfolio of high-quality bonds with a fixed maturity date. It is cost-effective and tax-efficient, making it an attractive option for investors seeking stability and income generation. However, investors should evaluate their investment objectives and risk tolerance before investing.

• Fund Symbol: EBBETF0430
• NAV: Rs.1351
• Expense Ratio: 0.00%
• AUM: Rs.18,519 crore
• Market Cap: 18,643.73 Cr
• Volume: 0.08 Lakhs
• Risk: Moderate risk
• Minimum lump sum investment: Rs.1,000

Returns:

14. Bharat Bond ETF - April 2031

Bharat Bond ETF - April 2031 is considered as one of the best ETFs in india to invest due to its fixed maturity date, diversification benefits from investing in high-quality bonds, cost-effectiveness, and tax efficiency. However, investors should assess their goals and risk tolerance before investing.

• Fund Symbol: EBBETF0431
• NAV: Rs.1209.29
• Expense Ratio: 0.00%
• AUM: Rs.13,394 crore
• Market Cap: 13,375.35 Cr
• Volume: 0.02 Lakhs
• Risk: Moderate risk
• Minimum lump sum investment: Rs.1,001

Returns:

15. ICICI Prudential Nifty Midcap 150 Etf

ICICI Prudential Nifty Midcap 150 Etf (MIDCAPIETF) focuses on mid-cap companies, offering investors exposure to this market segment with growth potential higher than large-cap stocks but lower than small-cap stocks. Mid-cap stocks are known for delivering attractive returns over the long term, making MIDCAPIETF a suitable choice for investors seeking growth opportunities in the mid-cap segment.

• Fund Symbol: MIDCAPIETF
• NAV: Rs.174.04
• Expense Ratio: 0.15%
• AUM: Rs.295 crore
• Market Cap: 268.54 Cr
• Volume: 0.26 Lakhs
• Risk: Very High risk
• Minimum lump sum investment: Rs.5,000

Returns:

6 Best Performing ETFs last 10 years in India

These are the 6 Best performing ETFs in the last 10 years in India, as per their 5year and 15year comparison which include 2 Best Gold ETFs and 4 Other sector ETFs

Best ETFs in India for April 2024

Advantages of Investing in Best ETFs in India

1. Liquidity: They are traded on stock exchanges throughout the trading day, allowing investors to buy and sell shares at market prices.
2. Low Costs: ETFs typically have lower expense ratios than actively managed mutual funds, as they passively track an index rather than rely on active management.
3. Transparency: ETFs disclose their holdings daily, allowing investors to see what securities are included in the fund.
4. Intraday Trading: ETFs can be traded throughout the trading day at market prices, allowing investors to take advantage of intraday price movements.
5. Risk Management: ETFs offer built-in risk management features, such as stop-loss orders and options contracts, which can help investors mitigate downside risk and protect their investment capital.

Types of ETFs

1. Equity ETFs: Invest in companies' stocks, providing exposure to a specific market index or sector.
2. Commodity ETFs: Track the price of a particular commodity, such as gold, oil, or agricultural products.
3. Bond ETFs: Hold a portfolio of bonds, offering diversification and income through fixed-interest payments.
4. Currency ETFs: Reflect the performance of a single currency or a basket of currencies relative to others.
5. Real Estate ETFs: Invest in real estate investment trusts (REITs) or physical properties, offering exposure to the real estate market.
6. Multi-Asset ETFs: Hold a mix of asset classes, such as stocks, bonds, and commodities, providing diversified exposure in a single fund.
7. Inverse ETFs: Seek to profit from the decline in the value of an underlying asset or index.
8. Factor ETFs: Focus on specific factors like value, growth, or volatility, aiming to outperform the broader market.
9. Smart Beta ETFs: Utilize alternative weighting schemes or strategies to enhance returns or reduce risk compared to traditional market-cap-weighted indices.

ETFs vs Mutual Funds

Here's a difference between ETFs and Mutual Funds

• Trading: ETFs are traded on stock exchanges throughout the day, whereas mutual funds are traded once at the end of the trading day.
• Price: ETF prices are market-determined, whereas mutual fund prices are based on the net asset value (NAV).
• Flexibility: ETFs can be bought and sold intraday, providing more flexibility, while mutual funds are redeemed at NAV at the end of the trading day.
• Tax Efficiency: ETFs are typically more tax-efficient due to their structure, while mutual funds may incur capital gains distributions resulting in taxes.
• Trading Costs: ETFs may incur brokerage fees, while mutual funds generally do not, but may have redemption fees.

ETFs vs Equity Stock

Here's a comparison between ETFs and Equity Stocks

• Nature of Investment: ETFs represent diversified baskets of securities, while equity stocks provide direct ownership in a single company.
• Diversification: ETFs offer instant diversification across multiple assets, reducing individual stock risk, whereas equity stocks focus solely on one company's performance.
• Liquidity: ETFs trade on stock exchanges throughout the day, offering high liquidity, while the liquidity of individual stocks varies based on market demand and trading volume.
• Risk and Return: ETFs provide exposure to broader market trends with relatively lower risk, whereas investing in individual stocks carries higher risk as performance depends solely on the company's success.

How to Invest in Best ETFs?

You can invest in Best ETFs in India without any hassle in easy steps using the below instructions:

• Step 1: To begin, connect with a stockbroker to establish an online trading and DEMAT Account, the initial and most critical step. ( Click here to get your free demat )
• Step 2: Then, utilise your Login ID and Password to access your account via the broker's online trading portal website.
• Step 3: In the subsequent step, search the Gold ETF you wish to invest in. You can make a lump sum investment or invest regularly through systematic SIPs. Additionally, you can explore Mutual Funds that include inherent gold ETFs.
• Step 4: Order a buy order for a specific quantity of Gold ETF units.
• Step 5: Upon completion, expect to receive a confirmation message via your designated Phone number or Email Address.
• Step 6: The web system will automatically debit a small fee from your linked Savings Account.

Factors to Consider Before Investing in Best ETFs

When considering investing in ETFs, it's crucial to assess various factors to make informed decisions:

1. Asset Class Alignment: Determine if the ETF aligns with your investment objectives and risk tolerance. ETFs cover diverse asset classes such as stocks, bonds, gold, or sectors.
2. Liquidity Analysis: Check the liquidity of the ETF to ensure ease of buying and selling. High liquidity means a significant volume of shares traded daily, reducing the risk of price fluctuations and ensuring you can enter or exit positions without a significant impact on the market price.
3. Fund Size Assessment: Evaluate the fund size, as larger ETFs often offer advantages such as lower expense ratios and higher liquidity.
4. Historical Performance Review: Review the historical performance of the ETF relative to its benchmark index and peers. While past performance doesn't guarantee future results.
5. Diversification Analysis: Consider the level of diversification offered by the ETF's underlying holdings.

Tax Implications of ETF Investments

When it comes to investing in Exchange Traded Funds (ETFs), understanding the tax implications is essential for maximizing returns and managing overall tax liability.
Here's an overview of the tax treatment of income and capital gains from ETF investments:

Equity ETFs

For ETFs that primarily invest in equity-oriented instruments, the tax treatment is akin to that of equity shares:

• Long-Term Capital Gain (LTCG): Any gain realized from the sale of equity ETF units held for more than 12 months is classified as LTCG. LTCG on equity ETFs exceeding INR 1,00,000 are taxed at a rate of 10%.
• Short-Term Capital Gain (STCG): Profits from the sale of equity ETF units held for less than 12 months are considered STCG and taxed at a rate of 15%.

Other ETFs

For ETFs where less than 35% of the funds are invested in domestic equity shares, the tax treatment varies based on the acquisition date:

ETFs Acquired After April 1, 2023:

The recent budget introduced amendments affecting the tax treatment of certain ETFs. Specified ETFs no longer receive indexation benefits for LTCG computation. Consequently, ETFs with less than 35% investment in domestic equity shares are now subject to taxation at applicable slab rates.

ETFs Acquired Before April 1, 2023:

Long-Term Capital Gain (LTCG): Gains from selling other ETF units held for more than 36 months qualify as LTCG. These LTCGs are taxed at a rate of 20% with indexation benefits.

Short-Term Capital Gain (STCG): Profit from selling other ETF units held for less than 36 months is treated as STCG and taxed according to the applicable slab rates.

Understanding the tax implications of ETF investments empowers investors to make informed decisions and optimise their tax strategy. It's advisable to consult with a stock broker like Lakshmishree Investment for personalised advice tailored to individual financial circ*mstances.

Risks Associated with ETFs

Investing in Exchange Traded Funds (ETFs) offers various benefits, but it's crucial to be aware of the potential risks involved. Here are some key risks associated with ETF investments:

Market Risk:

ETF prices are subject to market fluctuations. If the underlying assets in which the ETF invests experience a decline in value, the ETF's price may also decrease, leading to potential losses for investors.

Liquidity Risk:

ETFs traded on stock exchanges may face liquidity challenges, especially for less actively traded funds. Limited liquidity can impact the ability to buy or sell ETF shares at desired prices, potentially resulting in increased transaction costs or difficulty exiting positions.

Tracking Error:

Despite ETFs' goal to replicate the performance of their underlying index, tracking errors may occur. Portfolio rebalancing and imperfect replication techniques can lead to deviations between ETF and index returns.

Sector Concentration Risk:

Certain ETFs may focus on specific sectors or industries, resulting in concentration risk. If the sector experiences adverse events or underperforms, it can disproportionately impact the ETF's returns and expose investors to heightened risk.

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Conclusion

ETFs represent a valuable investment vehicle that aligns with various investment objectives, whether seeking long-term growth, income generation, or capital preservation. With careful consideration of the factors discussed in this article about best ETFs in India, investors can harness the potential of ETFs to achieve their financial goals and navigate the ever-changing landscape of the investment market.

Frequently Asked Questions