Best ETFs in India 2026 - Top Performing Index, Gold, Silver & Sector ETFs to Invest

India’s investment landscape has changed dramatically.

Investors today are no longer chasing random stock tips or speculative ideas. They are looking for low-cost Investing, transparent portfolios, passive wealth creation, global diversification, and protection against inflation.

This shift is exactly why Exchange Traded Funds (ETFs) have moved from being a niche product to becoming a core part of modern portfolios.

From Nifty 50 ETFs managing over ₹2 lakh crore in assets to record inflows into Gold and Silver ETFs during 2025–26, ETFs are now mainstream wealth-building tools in India.

Whether you are a beginner looking for broad market exposure, a conservative investor seeking stability, or someone exploring sector opportunities, ETFs offer flexibility, liquidity, and cost efficiency.

In this detailed guide, we analyse the best ETFs in India, compare categories based on returns, expense ratios and assets under management, explain the latest taxation rules, and help you choose the right ETF based on your Financial goals.

Let’s begin.

Best ETFs to Invest in 2026 India

There is no single “best ETF” that suits every investor. The right choice depends largely on your financial goals, risk tolerance, and time horizon. Below is a detailed category-wise breakdown to help you understand how different ETFs function and who they may be suitable for.

Top Index ETFS 2026

Index ETFs track broad market indices like Nifty 50, Sensex or Bank Nifty. They are ideal for long-term passive investing.

📊 Real Market Snapshot (As of 2026)

• SBI ETF Nifty 50 is among the largest ETFs in India by assets under management, with AUM exceeding ₹2 lakh crore as of 2026.

• Nifty 50 ETFs collectively form the backbone of India’s passive investing segment.

• Expense ratios for leading Nifty ETFs are as low as 0.05%.

Leading Nifty 50 ETFs typically maintain tracking error below 0.10–0.50%, depending on liquidity and replication strategy.

Top Index ETFs

*Returns indicative. Check AMC/NSE website for latest updated numbers.

Why Index ETFs Remain the Core of Many Portfolios

• 1. Broad Market Exposure

Index ETFs track established benchmarks like the Nifty 50 or Sensex, giving investors exposure to multiple large-cap companies across sectors. Instead of relying on individual stock selection, investors participate in the overall performance of India’s leading companies. Over long periods, broad indices tend to reflect economic growth and corporate earnings expansion.

• 2. Lower Tracking Error in Large ETFs

Tracking error measures how closely an ETF replicates its benchmark index. Large AUM index ETFs typically have better liquidity, tighter bid-ask spreads, and more efficient replication. As a result, their returns stay closely aligned with the index they track — which is the primary objective of passive investing.

• 3. Very Low Expense Ratios

Index ETFs generally have lower expense ratios compared to actively managed Equity Funds. Since they follow a passive strategy and do not require active stock selection, operational costs are reduced. Over long-term holding periods, lower costs can significantly improve net returns due to compounding.

• 4. Suitable for Long-Term Systematic Investing

Although ETFs trade on exchanges like stocks, many investors use them for disciplined, long-term wealth accumulation. Regular investments into broad market ETFs allow gradual participation in market growth while reducing the impact of short-term Volatility through staggered buying.

Best Gold ETFs In India 2026

Gold ETFs invest in physical gold and track domestic gold prices.

📊 Market Snapshot

• gold ETF AUM crossed record highs in 2025 amid global uncertainty.
• Strong investor inflows during volatility.
• Acts as hedge against equity corrections.

Top Gold ETFs

*Check AMC/NSE website for latest updated numbers.

Gold ETFs are suitable for:

• Portfolio diversification
• Inflation hedge
• Risk management

Best Silver and Precious Metals ETFs 2026

Silver ETFs have gained popularity recently due to strong multi-year performance driven by industrial demand, supply constraints, and rising metal prices. However, silver remains more volatile than gold, so allocation should be aligned with risk tolerance.

*Indicative returns based on market performance trends as of late 2025 / early 2026; past performance does not guarantee future returns.

*Silver ETF 3-year CAGR projections from recent trend analyses

Best Sector and Thematic ETFs 2026

*Returns fluctuate with market conditions.

Why Sector ETFs Are Different

• Concentrated exposure to one industry
• Higher volatility compared to broad index ETFs
• Cyclical performance — may outperform strongly in specific phases
• Suitable for tactical allocation rather than core portfolio
• While returns can be strong, short-term fluctuations can be significant

Best Bond ETFs in India 2026

Bond ETFs provide exposure to government securities or short-term debt instruments.

*Check AMC/NSE website for latest updated numbers.

Why Bond ETFs Matter

• Interest rate cycles directly impact returns
• Long-duration bond ETFs benefit when rates fall
• Short-duration ETFs offer lower volatility
• Useful for Asset Allocation and portfolio stability

Best Global Index ETFs 2026

*Returns are indicative and based on publicly available data as of early 2026. Past performance does not guarantee future returns. Investors should evaluate currency risk, global market volatility, and tracking efficiency before investing.

Currency Exposure Through ETFs in India

Unlike the US markets, India does not have widely traded standalone currency ETFs tracking USD/INR. However, investors get indirect currency exposure through:

*Important Insight - When INR depreciates against USD, global ETFs may generate additional returns for Indian investors — even if the US market remains flat. This makes global ETFs partially act like currency diversification tools.

How to Choose Best ETFs in India

Following are the important parameters that investors have to look in a Fund in order to invest in the best ETFs in India.

1. Look at the Liquidity

The liquidity of the ETF is one of the parameters that will determine the profitability of your investment. Look for an ETF that provides adequate liquidity. There are two factors that play a role in the liquidity of the Exchange Traded Fund–the liquidity of the shares that are being tracked and the liquidity of the fund itself. Monitoring the liquidity of an ETF is important, while an investment is made and it may be profitable, it is important to ensure that one is able to exit when they want to. In situations of the market, declines are when liquidity gets tested. ETFs work in a way that there are market makers available for buying & selling, these ensure that liquidity is available in an ETF all the time.

2. Know the Expense Ratio

An ETF’s expense ratio is often the deciding factor when it comes to investing in the best ETFs. A fund’s expense ratio is the measure of the cost to run the fund. The expense ratio can include various operational costs like management fee, compliance, distribution fee, etc., and these operating expenses are taken out of the ETF’s assets, hence, lowering the return for the investors. The lower the expense ratio, the lower is the cost of investing in the ETF.

3. Check for Tracking Error

The next thing to look in an ETF is the tracking error. In simple words, the tracking error is the amount by which a fund’s return, as indicated by its NAV (Net Asset Value), differs from the actual index return. Well, in India, most of the popular exchange traded funds do not completely track an index, instead, they invest part of the assets in the index, while the rest is used for investing in other financial instruments. This is done in order to increase returns so that you will find the tracking error to be high in most of the ETFs you invest in.

As an overview, low tracking error means a portfolio is closely following its benchmark, and high tracking errors mean the opposite. Thus, the lower the tracking error the better the index ETF.

Benefits of Investing in Exchange Traded Funds

Some of the benefits of investing in best ETFs or exchange traded funds are as follows-

a. Liquidity

Exchange traded funds can be sold and bought at any time throughout the trading period.

b. Low cost

ETFs make an affordable investment due to their lower expense ratios than a Mutual Fund.

c. Tax Advantage

Buying and selling of shares in the open market do not impact the exchange-traded fund’s tax obligation.This is the reason exchange traded funds are tax efficient.

d. Transparency

There is a high level of transparency in ETFs as the investment holdings are published every day.

e. Exposure

Exchange traded funds provide diverse exposure to specific sectors as the case may be.

Why ETFs Matter?

India has a huge population. Trading and investing has been rising over the years. It has become a popular destination for investing as an emerging market. ETFs have been around the investment community for almost a decade. In India, ETFs started in 2001, with Nifty BEes being the first ETF to be launched. The asset is designed to track a pool of securities that are listed on the Indian stock exchanges. Underlying securities could include Mutual Funds, bonds, stocks, etc. Over time, ETFs have become an easy and a preferred route for many investors to take exposure to the markets. It has created possibilities for investors to gain broad exposure to entire stock markets in different countries and specific sectors with ease.

FAQs

1. What are the different types of ETFs?

A: The different types of ETFs to invest are as follows:

• Index ETF
• Stock ETF
• Bond ETF
• Commodity ETF
• Currency ETF
• Actively managed ETF
• Inverse ETF
• Leveraged ETF

2. Why is ETF important?

A: ETF helps you diversify your portfolio of investments and increases the sources for earning passive income. Additionally, they have lower expense ratios and known to produce good returns. As, ETFs are passively managed you do not have to worry about tracking your ETFs daily.

3. Which ETF should you invest in?

A: While investing in the ETF, you must first check the type of ETF you want to invest in. For instance, following are the Index Funds - Motilal Oswal NASDAQ 100 ETF, HDFC Sensex ETF, and SBI Sensex, Edelweiss ETF or UTI ETF, etc. Before picking one, you must check past 3-years return and the NAVs. Similarly, if you are thinking of investing in Sector ETFs, then you can select from Nippon ETF Consumption, Nippon ETF BeEs, Kortak NV 20ETF, or ICICI prudential ETF.

5. Do I need to get in touch with registered agents to invest in ETFs?

A: Yes, only registered agents can help you invest in ETFs. Moreover, they can advise you regarding the best performing ETF depending upon the returns and the type.

6. Are Gold ETFs better investments?

A: You can invest in gold ETFs offered by companies like Birla Sun Life Gold, SBI Gold, Axis Gold, UTI Gold, or Invesco India Gold. The Gold ETFs provide healthy returns as the price of gold rarely depreciates. It also acts as a buffer for your other investments and also works as a hedge against inflation.

7. Do ETFs have adequate liquidity?

A: Yes, ETFs have better liquidity compared to other investments. You can exit the market whenever you want to, and you can trade the ETFs anytime throughout the trading period.

8. What is the main difference between the ETF and a mutual fund?

A: ETF and mutual fund's primary difference is that an ETF is traded actively during the trading hours. However, a mutual fund can be traded at the closing of the Net Asset Value. This means an ETF has more liquidity compared to a mutual fund.

9. Is ETF tax efficient?

A: Yes, ETFs are tax-efficient primarily because there are no Capital Gains. When an ETF is sold in the open market, it behaves like a stock, and it is sold from one investor to another without any capital gains through the process. Hence, ETFs are more tax-efficient compared to other forms of investments that result in capital gains.