Best Performing ETFs In India

Exchange traded funds or ETFs have become more and more popular in India in the recent past. These funds provide investors with an easy and accessible option to diversify their investment portfolios combining the advantage of mutual funds and individual stocks. Moreover, ETFs diversify in a way that caters to an array of different investment profiles and risk appetites. Let us know more about what ETFs are and the best ones to invest in this year.

ETFs or Exchange traded funds are investment vehicles that track the performance of specific indices, sectors, commodities, or asset classes. Unlike mutual funds, ETFs trade on stock exchanges much like individual stocks. These come with good liquidity and flexibility that greatly benefit modern day investors. ETFs are passively managed and aim to mirror the performance of an index rather than trying to outperform it. This structure allows ETFs to have lower fees as compared to actively managed mutual funds. You can take advantage of such ETFs as it is simple, cost friendly and provides a diverse exposure to different market segments with minimal effort.

• ETFs have lower management fees as compared to traditional mutual funds that make them more affordable.

• ETFs provide access to a wide range of securities that reduce the risk associated with individual stock investments.

• ETFs can be traded on the stock exchange throughout the day which means they are flexible and liquid.

With hundreds of ETFs in the market today, it is key to know which ones are leading in terms of their market performance. Here are a few of the best ETFs in India to get you started:
 

CPSE Exchange Traded Fund

The CPSE Exchange Traded Fund is a passive investment fund launched by Nippon India Mutual Fund that tracks the Nifty CPSE index. This ETF includes 11 listed Central Public Sector Enterprises. It offers diversified exposure to government owned companies. Its 1 year and 5 year CAGR stands at 11% and 35.70% respectively, making it one of the top performing mutual funds in India. It currently has a net asset value of around Rs. 98.6338.
 

SBI ETF Nifty Next 50

SBI ETF Nifty Next 50 is an open ended exchange traded fund that closely tracks the valuation of the Nifty Next 50 index. It provides investors with exposure to the companies ranked 51 -100 listed on the Nifty Next 50 index. The current net asset value of this fund is Rs. 794.33, as on 17 September 2024. Moreover, it has a total fund size of Rs. 3077.67 crores and a very low expense ratio of 0.15%.
 

Mirae Asset Nifty Next 50 ETF

Mirae Asset Nifty Next 50 ETF provides investors with an exposure to large cap and mid cap stocks listed on the Nifty Next 50 Index. This ETF has gained attention for its steady performance with a solid track record and a 3 year return of 21.11%. Mirae Asset Nifty Next 50 ETF currently has a net asset value of Rs. 764.88 and a fund size of Rs. 267.51 crores.
 

Nippon India ETF Nifty Midcap 150

The Nippon India ETF Nifty Midcap 150 is one of the best performing exchange traded funds available in the market today. Launched in January 2019, this relatively new ETF has a high 5 year, 3 year, and 1 year CAGR of 31.48%, 27.80% and 49.80%, respectively. This shows how well the fund has stood up against giant mutual fund houses that have several older funds in this segment.
 

Motilal Oswal Midcap 100 ETF

The Motilal Oswal Midcap 100 ETF provides its investors with versatile exposure to the Nifty Midcap 100 index. This ETF focuses on the top 100 mid cap companies in India and has shown consistent performance over the years. It has a 3 year return of 26.96% and a current net asset value of Rs. 64.37. Moreover it also has a 1 year return of 47.70% and a very low expense ratio of 0.22%.

The following are some of the key advantages of investing in top exchange traded funds in India:

• ETFs provide a diversified exposure to a wide range of securities that ultimately reduce risks associated with individual stock investments.
• ETFs are more cost effective with lower management fees as compared to traditional mutual fund schemes.
• ETFs can be bought and sold on the stock exchange throughout the trading day making it highly liquid.
• Regular updates on fund holdings help investors track their portfolios easily maintaining transparency and access.

ETFs open up a great and inexpensive avenue for diversification and investment in various sectors with minimum efforts. There are numerous ETFs in India that have performed exceptionally well, and investors can pick funds based on the risk appetite and investments they look to make. But one needs to check the performance, expense ratio, and conditions prevailing in the market before finalising their decisions.