Top ETFs for Long-Term Investment
Selecting the right ETFs is crucial for long-term wealth creation. The research team experts at Samco Securities have compiled a list of the best-performing ETFs in the last 10 years in India along with key metrics like historical performance, assets under management (AUM) and expense ratio. That said, remember to thoroughly evaluate the best ETFs to invest in India to ensure they align with your financial goals and risk tolerance before investing.
Particulars | Net Asset Value (NAV) (Rs.) | Return 1Y | Return 3Y | Return 5Y | AUM (Rs. in Crore) | Expense Ratio |
250.95 | 12.8% | 12.1% | 15.6% | 212,886 | 0.04% | |
85.24 | 31.3% | 42.9% | 30.1% | 44,279 | 0.07% | |
UTI BSE Sensex ETF | 851.27 | 12.3% | 11.5% | 14.8% | 47,976 | 0.05% |
710.56 | 29.6% | 18.3% | 20.1% | 3,204 | 0.15% | |
LIC MF ETF - Nifty 100 | 268.5747 | 24.92% | 14.14% | 16.38% | 720 | 0.28% |
Motilal Oswal Midcap 100 ETF | 60.42 | 25.2% | 24.1% | 27.9% | 554 | 0.22% |
Nippon ETF Dividend Opportunities | 80.29 | 20.7% | 21.3% | 22.6% | 74 | 0.37% |
Motilal Oswal NASDAQ 100 ETF | 205.02 | 34.1% | 14.6% | 23.6% | 8,299 | 0.58% |
Nippon ETF Gold BeES | 64.61 | 21.4% | 15.8% | 12.9% | 13,725 | 0.81% |
512.7 | 7.6% | 12.5% | 9.8% | 5,416 | 0.15% | |
242.85 | 9.5% | 5.8% | 5.3% | 3,047 | 0.14% | |
Nippon India ETF Nifty 1D Rate Liquid BeES | 999.99 | 6.0% | 5.2% | 4.1% | 13,656 | 0.69% |
15.06 | 18.6% | 15.1% | 21.2% | 176 | 0.25% | |
Kotak Nifty PSU Bank ETF | 632.99 | 14.4% | 37.7% | 21.4% | 1,349 | 0.49% |
ICICI Prudential S&P BSE 500 ETF FoF | 15.30 | 16.3% | 14.1% | 8.9% | 122 | 0.59% |
Top 5 ETFs in India
The SBI - ETF Nifty 50 is one of the best ETFs to invest in India for long-term growth. Since the fund tracks the Nifty 50 broad-market index, it provides a combination of diversification and wealth creation.
As of January 6, 2025, the ETF’s Net Asset Value (NAV) stood at Rs. 250.95 and its AUM at Rs. 2,12,886 crore. Over the past five years, SBI - ETF Nifty 50 has delivered a return of 15.6%, demonstrating resilience across market cycles. Its consistent performance with a low expense ratio of just 0.04% makes it one of the top 5 ETFs in India.
Nippon ETF Dividend Opportunities
For investors prioritising dividend income and long-term growth, the Nippon ETF Dividend Opportunities is a standout choice among the top 5 ETFs in India that provides targeted exposure to high-dividend-yield stocks.
With a NAV of just Rs. 80.29 as of January 6, 2025, the ETF offers a low-cost entry point. In terms of performance, the Nippon ETF Dividend Opportunities fund has delivered returns of 22.6% over five years, positioning itself among the best-performing ETFs in the last 10 years in India.
The SBI - ETF 10Y Gilt is the best ETF in India for the long term for risk-averse investors. The fund provides exposure to government bonds and can be used to mitigate equity market risks. As of January 6, 2025, the ETF’s NAV was Rs. 242.85 and its 5-year return was 5.3%. The SBI - ETF 10Y Gilt’s low expense ratio of just 0.14% positions it among the cost-efficient top 5 ETFs in India and is ideal for investors seeking to diversify their portfolios.
UTI BSE Sensex ETF
Investors looking for the best ETFs to invest in India that track the Sensex broad-market index can consider the UTI BSE Sensex ETF. The fund’s NAV stood at Rs. ₹851.27 and its AUM at Rs. 47,976 crore as of January 6, 2025.
In terms of returns, it has generated around 12.3% in one year and 14.8% over five years. The expense ratio of the UTI BSE Sensex ETF is just 0.05%, making it the best ETF in India for the long term.
Motilal Oswal NASDAQ 100 ETF
The Motilal Oswal NASDAQ 100 ETF is one of the best-performing ETFs in the last 10 years in India providing global exposure. This fund is ideal for investors seeking to diversify their portfolio by investing in stocks listed on the U.S. exchange - NASDAQ 100.
As of January 6, 2025, the ETF’s NAV was Rs. 205.02 and its AUM was Rs. 8,299 crore. The Motilal Oswal NASDAQ 100 ETF has delivered impressive returns of 34.1% in one year and 23.6% over five years, standing out among the best ETFs in India for the long term.
What are the Key Features of ETF Investments?
To make the most of your investments in the best-performing ETFs in the last 10 years in India, you need to understand their characteristics better. So, let us discuss the key features of exchange-traded funds.
Index Tracking
ETFs closely follow the performance of specific indices, making them transparent and easy to understand. By studying the best-performing ETFs in the last 10 years in India, you can identify funds that have consistently mirrored their underlying indices with precision.
Exchange-Based Trading
ETFs trade on stock exchanges like equities, allowing you to buy and sell units during market hours. This feature ensures liquidity and flexibility, even for funds like the best small-cap ETFs in India, which target niche segments.
Transparency
ETF holdings are disclosed daily. This provides complete clarity on the fund's composition for investors. So, you can check the composition of the top 5 ETFs in India regularly and determine your asset allocation accordingly.
Wide Variety of Choices
ETFs cover diverse asset classes like equities, bonds, commodities and more. Selecting from the best ETFs to invest in India allows you to diversify across categories without complications and misunderstandings.
Passive Management
ETFs are passively managed. This reduces the influence of fund managers' biases and human error on the composition of the fund. It also allows you to benefit from consistent index replication, particularly if you choose the best ETFs in India for the long term.
Why Invest in ETFs?
Beginners and even seasoned investors in the stock market often focus on direct investments in the equity and debt segments. However, by also considering the best ETFs to invest in India, you can diversify your portfolio and tap into different market-linked investments. Here are the top reasons to include ETF investments in your portfolio.
Diversification Across Sectors
Investing in ETFs offers easy diversification across various sectors and helps minimise risk while optimising returns. For instance, reviewing the best-performing ETFs in the last 10 years in India can help identify funds with consistent performance from multiple industries.
Cost Efficiency
ETFs have lower expense ratios compared to actively managed funds, making them a cost-effective option. For example, exploring the top 5 ETFs in India can highlight funds with minimal management fees. This allows you to allocate more funds directly to your investments rather than incurring excessive charges.
Small-Cap Exposure
ETFs also provide a convenient way to gain exposure to small-cap stocks, often with high growth potential. The best small-cap ETFs in India offer targeted access to this segment, so you can participate in the upside of emerging companies without the excessive risk of picking individual stocks.
Long-Term Wealth Creation
ETFs are also ideal for building wealth over time due to their simplicity and stability. Identifying the best ETFs to invest in India allows you to strategically align with funds that track reliable indices. They may offer returns while reducing the complexity of managing a curated investment portfolio.
Ease of Access and Liquidity
ETFs are traded like stocks. This makes them highly liquid and easy to buy or sell during market hours. The best ETFs in India for the long term often offer benefits like stable performance, liquidity and flexibility — helping you manage your investments conveniently without being tied to rigid lock-in periods.
Are There Any Risks Involved in ETF Investments?
While the top 5 ETFs in India at any given time may hold significant potential benefits, not even the best exchange-traded funds are risk-free. You must factor in the following risks before investing in ETFs.
Market Volatility Risk
ETFs track market indices, meaning their performance fluctuates with the market. Even the best-performing ETFs in the last 10 years in India have experienced short-term losses during downturns, making it crucial for investors to have a clear risk tolerance and long-term perspective.
Sector-Specific Risks
Some ETFs focus on specific sectors or asset classes, thus exposing you to concentrated risks. For instance, while the best small-cap ETFs in India can offer high growth potential, they may also carry higher volatility due to the nature of small-cap stocks. This is why you should carefully consider your risk appetite.
Tracking Error
ETFs aim to replicate the performance of different indices. However, they may sometimes deviate from the benchmark due to fees or management inefficiencies. Even among the top 5 ETFs in India, tracking errors can result in returns slightly lower than the underlying index and impact the overall performance.
Limited Growth in Low Markets
ETFs mirror market trends, so, during periods of low market growth, their returns can stagnate. Even the best ETFs to invest in India cannot really outperform the indices they track, making active strategies more appealing during stagnant market conditions. However, this comes at a higher cost.
Liquidity Concerns in Niche ETFs
While most ETFs are liquid, niche funds may face lower trading volumes. This could lead to higher bid-ask spreads and make trading difficult. For example, the best ETFs in India for the long term might not face such issues, but investors in less popular ETFs should be cautious of potential liquidity risks.
How to Get Started with Investing in ETFs?
Want to include ETFs in your investment portfolio? Here is how you can get started.
- Step 1: Understand your investment goals and identify whether you aim for long-term growth, income or diversification.
- Step 2: Explore your options, which range from the best-performing ETFs in the last 10 years in India and the best small-cap ETFs in India, to find targeted growth opportunities.
- Step 3: Set up a demat and trading account with a reliable broker like Samco Securities to start investing.
- Step 4: Evaluate expense ratios, historical returns and tracking errors to find the most cost-effective ETFs.
- Step 5: Select ETFs that align with your financial goals and risk tolerance levels.
- Step 6: Use the trading platform offered by your brokerage partner, like the feature-rich and user-friendly Samco trading app, to buy ETF units during market hours.
- Step 7: Regularly track the performance of your ETFs and rebalance your portfolio if needed.
This sums up all you need to know about ETF investing in India. Now that you are aware of the fundamentals, you can make more informed decisions about the ETFs to include in your portfolio. If you require additional assistance, you can always turn to financial advisors for expert guidance.
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