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Best ETFs in India- Invest in Best Performing ETFs 2019

Updated on April 15, 2019 , 20968 views

After the introduction of Mutual Funds, Exchange Traded Funds (ETFs) have become the most innovative and popular securities amongst investors in India.

ETF instruments have created a valuable space amongst investors who find difficulties to master the trick of the trade of analyzing and selecting stocks of their portfolio. More importantly, due to ETF’s low cost and track record of returns, they have caught the eye of investors in a big way!

With more and more investors looking at exchange traded funds as a potential investment option, it is worthwhile to identify the top and best ETFs to invest in 2018 India.

Best ETFs to Invest in 2019 India

Exchange traded funds in India can be broadly segregated into six categories, they are – Index ETFs, Gold ETFs, Sector ETFs, Bond ETFs, Currency ETFs and Global Index ETFs.

Best-ETFs Best ETFs in India to Invest in 2018

Top & Best Index ETFS 2018

Fund Name 1M Return(%)# 3M Return(%)# 1Y Return (% p.a.)# 3Y Return (% p.a.)# 5Y Return (% p.a.)# Expense Ratio (%)* AUM (CR)*
Reliance ETF Nifty BeES 2.69 4.83 21.96 9.09 14.34 0.49 877
ICICI Prudential Nifty iWIN ETF 3.34 5.48 21.10 2.82 - 0.05 1,008
Motilal Oswal MOSt Shares M50 ETF -2.47 4.48 21.26 6.64 - 1.50 21
ICICI Prudential Sensex iWIN ETF 2.77 5.88 14.50 12.66 14.42 0.08 5
Motilal Oswal MOSt Shares Midcap 100 ETF 2.43 9.54 42.91 21.14 - 1.50 25.82
Reliance ETF Junior BeES -1.47 5.35 34.11 16.70 22.14 1.00 130

(#as of 24th May’17, as of 30th April’17)

Top & Best Gold ETFs In India 2017

Fund Name 1M Return(%)# 3M Return(%)# 1Y Return (% p.a.)# 3Y Return (% p.a.)# 5Y Return (% p.a.)# Expense Ratio (%)* AUM (CR)*
Reliance ETF Gold BeES -1.42 -1.66 -2.67 1.06 -1.10 1.00 2,706
Birla Sun Life gold ETF -2.53 -4.22 -3.57 0.19 -1.21 0.92 72
SBI Gold ETF -1.57 -2.25 -4.32 0.25 -1.57 1.07 813
UTI Gold ETF 0.86 -2.09 -4.07 0.60 -1.20 1.07 457

(#as of 24th May’17,as of 30th April’17)

Top & Best Sector ETFs 2018

Fund Name 1M Return(%)# 3M Return(%)# 1Y Return (% p.a.)# 3Y Return (% p.a.)# 5Y Return (% p.a.)# Expense Ratio (%)* AUM (CR)*
Reliance ETF Bank BeES 2.67 7.65 37.47 14.27 18.90 0.48 2,706
SBI ETF Nifty Bank Fund 4.77 8.11 38.60 - - - 521
CPSE ETF -3.31 1.31 46.74 3.28 - 0.06 7,493
Reliance ETF Dividend Opportunities 1.58 3.92 34.54 7.88 - 0.10 16
Reliance ETF Consumption 3.81 6.12 20.69 15.15 - 0.09 17
Reliance Infra BeES -3.03 4.15 23.10 -0.47 8.21 0.99 18
Kotak PSU Bank ETF -3.09 2.07 59.87 -5.97 1.84 0.20 3,277

(#as of 24th May’17,as of 30th April’17)

Top & Best Bond ETFs 2018

Fund Name 1M Return(%)# 3M Return(%)# 1Y Return (% p.a.)# 3Y Return (% p.a.)# 5Y Return (% p.a.)# Expense Ratio (%)* AUM (CR)*
Reliance ETF Liquid BeES 0.38 1.18 5.42 6.22 6.60 0.56 1,426
SBI ETF 10 year Gilt 1.55 2.49 - - - - 2
LIC Nomura MF G-Sec Long Term ETF 1.54 2.98 11.44 - - 0.25 77

(#as of 24th May’17, as of 30th April’17)

Top & Best Currency ETFs 2018

Fund Name 1M Return(%)# 3M Return(%)# 1Y Return (% p.a.)# 3Y Return (% p.a.)# 5Y Return (% p.a.)# Expense Ratio (%)* AUM (CR)*
Wisdom Tree Indian Rupee Strategy Fund - - - - - 0.45 58.72
Market Vectors- Indian Rupee/USD ETN -0.44 - -3.00 - -0.24 0.55 8.38

(#as of 24th May’17, as of 30th April’17)

Top & Best Global Index ETFs 2018

Fund Name 1M Return(%)# 3M Return(%)# 1Y Return (% p.a.)# 3Y Return (% p.a.)# 5Y Return (% p.a.)# Expense Ratio (%)* AUM (CR)*
Reliance ETF Hang Seng BeES 6.17 2.78 12.20 10.95 11.29 1.00 6
MOSt Shares NASDAQ 100 5.22 -5.61 34.43 23.98 23.11 1.50 71

(#as of 24th May’17,as of 30th April’17)

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.

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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.

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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.

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.

Transparency

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

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. In India, 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. An ETF 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. ETFs have created possibilities for investors to gain broad exposure to entire stock markets in different countries and specific sectors with ease.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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