Best ETFs in India 2025

List of 15 Best ETFs in India

India's ETF market has grown significantly in recent years, offering investors various options. Here's a list of the best etf to invest in 2025, based on their past returns:

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Data as of 30 Jan, 2024

Best ETFs to Invest in 2025

Here's an overview of the best performing ETFs in India, based on their past returns:

1. Nippon India ETF Junior BeES (JUNIORBEES)
The Nippon India ETF Junior BeES tracks the Nifty Next 50 Index, offering exposure to the next 50 largest companies after the Nifty 50. It has demonstrated excellent long-term performance, making it a suitable choice for growth-oriented investors.

2. SBI NIFTY NEXT 50 ETF (SETFNN50)
The SBI NIFTY NEXT 50 ETF also tracks the Nifty Next 50 Index, providing exposure to potential future large-cap stocks. It has been a strong performer across all time frames.

3. KOTAK NV 20 ETF (KOTAKNV20)
The KOTAK NV 20 ETF focuses on value stocks within the Nifty 50 by tracking the Nifty50 Value 20 Index. Its impressive long-term performance makes it appealing to value investors.

4. Invesco India NIFTY ETF (IVZINNIFTY)
The Invesco India NIFTY ETF tracks the Nifty 50 Index, offering exposure to India's top 50 companies. It has shown solid performance across all time periods.

5. Motilal Oswal M50 ETF (MOM50)
The Motilal Oswal M50 ETF is another option that tracks the Nifty 50 Index, providing exposure to India's 50 largest companies. It is known for consistent performance, particularly over the long term.

6. Quantum Nifty ETF (QNIFTY)
The Quantum Nifty ETF also tracks the Nifty 50 Index, offering similar exposure to large-cap Indian stocks. It has delivered strong and consistent performance across time frames.

7. Bandhan NIFTY ETF (IDFNIFTYET)
The IDFC NIFTY ETF tracks the Nifty 50 Index as well, but being a newer ETF, it has limited long-term data. However, it has delivered solid short- and medium-term performance.

8. SBI NIFTY 50 ETF (SETFNIF50)
The SBI NIFTY 50 ETF, managed by SBI Funds Management, also tracks the Nifty 50 Index. It has been a consistent performer across all time periods.

9. Invesco India Gold ETF (IVZINGOLD)
The Invesco India Gold ETF tracks domestic gold prices, offering exposure to gold without physical ownership. While returns are moderate, it serves as a valuable tool for portfolio diversification.

10. Kotak Nifty Bank ETF (BANKNIFTY1)
The Kotak Nifty Bank ETF tracks the Nifty Bank Index, providing focused exposure to the banking sector. It has moderate short-term returns but shows strong long-term performance.

11. Nippon India ETF Shariah BeES (SHARIABEEE)
The Nippon India ETF Shariah BeES tracks the Nifty50 Shariah Index, offering Shariah-compliant investment in large-cap stocks. It has performed strongly, particularly in the short and long term.

12. SBI 10 YEAR GILT ETF (SETF10GILT)
The SBI 10 YEAR GILT ETF tracks 10-year Government of India bonds, offering exposure to government securities. While returns are lower, they are more stable, making it suitable for conservative investors.

13. Nippon India ETF Bank BeES (BANKBEES)
The Nippon India ETF NIFTY Bank BeES tracks Nifty Bank TRI, offering exposure to the banking sector. By replicating the securities of the Nifty Bank Index in the same proportion, it aims to match the Index's performance. 

14. UTI BSE Sensex ETF (SENSEXETF)
The UTI BSE Sensex ETF tracks the BSE Sensex, offering exposure to the 30 largest and most actively traded stocks on the BSE. It delivers moderate performance across all time frames.

15. CPSE ETF (CPSEETF)
Finally, the CPSE ETF (CPSEETF) tracks the Nifty CPSE Index, investing in Central Public Sector Enterprises. It boasts exceptional short-term performance and solid medium-term returns.

These ETFs offer diverse investment options, covering various indices, sectors, and asset classes. The Nifty Next 50 and Value 20 ETFs have shown strong performance across all time frames. Nifty 50 ETFs offer consistent returns, while sector-specific and thematic ETFs like Gold, Banking, and Shariah-compliant options provide targeted exposure. The CPSE ETF stands out with its exceptional short-term performance. When choosing among these ETFs, investors should consider their risk tolerance, investment horizon, and overall portfolio strategy.

What Are ETFs?

An ETF, or Exchange Traded Fund, is like a financial smoothie. It blends various investment ingredients into one easy-to-drink package. An ETF is a type of investment fund that trades on stock exchanges, just like individual stocks. But instead of representing a single company, an ETF typically holds a collection of stocks, bonds, or other assets.

Think of an ETF as a basket filled with different fruits. Each fruit represents a different stock or asset. Buying a share of an ETF is like buying a slice of that fruit basket. You get a little of everything inside rather than buying each fruit separately.

ETFs are designed to track the performance of a specific index, sector, commodity, or other asset class. For example, a Nifty 50 ETF would aim to mirror the performance of India's Nifty 50 index, which represents 50 of the largest Indian companies.

Types of ETFs

ETFs come in various flavours, each catering to different investment strategies and goals. Here are some common types of ETFs available in India:

Equity ETFs: These track stock market indices like the Nifty 50 or BSE Sensex.

Debt ETFs: These invest in fixed-income securities like government or corporate bonds.

Gold ETFs: These track gold prices, offering a way to invest in gold without physical ownership.

International ETFs: These provide exposure to foreign markets or global companies.

Sector ETFs: These focus on specific industries like banking, IT, or pharmaceuticals.

Smart Beta ETFs: These use alternative weighting schemes based on factors like volatility or momentum.

ETFs vs Mutual Funds

While both ETFs and mutual funds offer ways to invest in a diversified portfolio, they have some key differences:

Trading: ETFs trade like stocks throughout the day, while mutual funds are priced and traded once daily after market close.

Minimum Investment: ETFs often have lower minimum investment requirements compared to mutual funds.

Costs: ETFs typically have lower expense ratios than actively managed mutual funds.

Transparency: ETFs disclose their holdings daily, while mutual funds usually do so monthly or quarterly.

Tax Efficiency: ETFs are generally more tax-efficient due to their structure and lower turnover.

For example, if you want to invest ₹5,000 in the Nifty 50, you could buy about 18 units of Nippon India ETF Nifty 50

BeES (assuming a price of ₹276 per unit). With a mutual fund, you might need a higher minimum investment, sometimes ₹5,000 or more.

ETFs vs Equity Stock

While both ETFs and individual stocks are traded on exchanges, they differ in several ways:

Diversification: An ETF provides instant diversification across multiple stocks while buying individual stocks requires building your own diversified portfolio.

Risk: ETFs generally carry lower risk due to diversification, while individual stocks can be more volatile.
Management: ETFs are professionally managed to track an index, while individual stocks require more active management from the investor.

Dividends: ETFs may pay dividends from multiple companies, while individual stocks pay dividends from a single company.

For instance, buying Nippon India ETF Nifty 50 BeES shares gives you exposure to all 50 companies in the Nifty 50 index. To achieve the same diversification with individual stocks, you'd need to buy shares of all 50 companies separately.

How to Invest in ETFs

Investing in the top ETFs in India is relatively straightforward. Here's a step-by-step guide:
Open a Demat and Trading Account: You'll need these accounts to buy and hold ETFs. Many brokers offer online account opening.

Choose Your ETFs: Research and select ETFs that align with your investment goals and risk tolerance.

Place an Order: Log into your trading account, search for the ETF you want to buy, and place a buy order. You can choose between market orders (buy at current market price) or limit orders (buy only at a specified price or lower).

Monitor and Rebalance: Keep track of your ETF investments and rebalance your portfolio as needed to maintain your desired asset allocation.

For example, if you want to invest in the Nifty 50 index, you could search for "NIFTYBEES" in your trading platform and place an order for the number of units you want to buy.

Remember, it's always wise to start with a small investment and gradually increase as you become more comfortable with ETF investing.

Conclusion

ETFs offer a unique blend of diversification, cost-effectiveness, and flexibility, making them an attractive option for many investors in India. From broad market exposure to sector-specific strategies, from domestic markets to international ones, ETFs provide a wide range of investment opportunities. Whether you're looking for the best ETF to invest in 2025 or exploring the top ETF funds in India, these funds offer a convenient way to build a balanced portfolio.

Remember, successful investing is not just about picking the right investments but also about maintaining a disciplined approach, regularly reviewing your portfolio, and staying aligned with your financial goals.

Disclaimer: This blog is intended solely for educational purposes. The securities and investments mentioned are not to be construed as recommendations.