ETFs are excellent diversified investment tools, especially for beginners, as they combine the benefits of trading flexibility with lower costs compared to actively managed funds.
Let’s dive into my picks and explore why these ETFs stand out.
| ETF Name | Return in 1 Year | AUM (₹ Crores) |
|---|---|---|
| Nippon India ETF Nifty Midcap 150 (MID150BEES) | 44% | 1,752 |
| Nippon India ETF Nifty IT (ITBEES) | 37% | 2,505 |
| HDFC NIFTY Small Cap 250 ETF (HDFCSML250) | 37% | 530 |
| Mirae Asset NYSE FANG+ ETF (MAFANG) | 58% | 300 |
| ICICI Prudential Nifty 200 Momentum 30 ETF (MOM30ETF) | 52% | 305 |
1. Nippon India ETF Nifty Midcap 150 (MID150)
Midcap stocks often provide a balance of higher returns and moderate risk, making them an attractive choice for long-term investors. The Nippon India ETF Nifty Midcap 150 has been a consistent performer.
- Returns: 44% in 1 year, 20.54% CAGR in 3 years, 29.1% CAGR in 5 years.
- Expense Ratio: 0.21%.
- AUM: ₹1,752 crores.
- Sector Allocation: Highest exposure in financial services, followed by engineering, pharmaceuticals, and IT.
- Why It Stands Out: Offers solid diversification with 86.62% in midcap stocks and a PE ratio of 37. This ETF is suitable for those with a long-term horizon who can tolerate short-term volatility.
2. Nippon India ETF Nifty IT
Focused on India’s top IT companies, this ETF has demonstrated exceptional growth, especially during the tech boom.
- Returns: 207% overall since inception, 37% in the last year.
- Expense Ratio: 0.22%.
- AUM: ₹2,505 crores.
- Sector Allocation: Predominantly large-cap IT companies like TCS and Infosys.
- Why It Stands Out: The Indian IT sector remains resilient due to global outsourcing demand and digital transformation. This ETF can be a solid bet for tech enthusiasts looking for long-term growth.
3. HDFC NIFTY Small Cap 250 ETF
Small-cap ETFs are known for their high growth potential, albeit with increased risk. The HDFC NIFTY Small Cap 250 ETF has been an exceptional performer in this category.
- Returns: 90% overall since inception, 37% in the last year.
- Expense Ratio: 0.30%.
- AUM: ₹530 crores.
- Sector Allocation: Major exposure in financial services, engineering, chemicals, and pharmaceuticals.
- Why It Stands Out: Ideal for investors who are comfortable with volatility and have a long-term outlook, as small-cap stocks tend to outperform over extended periods.
4. Mirae Asset NYSE FANG+ ETF
For international diversification, this ETF focuses on U.S.-based tech giants, including companies like Apple, Amazon, and Google.
- Returns: 100% overall since inception in May 2021, 58% in the last year.
- Expense Ratio: 0.33%.
- AUM: ₹300 crores.
- Why It Stands Out: The U.S. tech sector remains a global leader, making this ETF a great option for exposure to the world’s largest economy and its most innovative companies.
5. ICICI Prudential Nifty 200 Momentum 30 ETF
Momentum investing focuses on companies showing strong price trends, and this ETF tracks the top 30 momentum stocks within the Nifty 200 index.
- Returns: 52% in 1 year.
- Expense Ratio: 0.30%.
- AUM: ₹305 crores.
- Sector Allocation: High exposure to engineering, automobiles, technology, and financial services.
- Why It Stands Out: A good choice for investors willing to accept higher short-term volatility for potentially superior long-term gains.
Key Considerations Before Investing in ETFs
- Liquidity: Ensure the ETF has decent trading volumes for seamless buying and selling.
- Tracking Error: A lower tracking error indicates better alignment with the index.
- Expense Ratio: The lower the expense ratio, the more cost-efficient the ETF.
- AUM (Assets Under Management): Avoid ETFs with very low AUM as it might indicate low investor interest.
Final Thoughts
ETFs are excellent investment tools for both beginners and experienced investors. Whether you prefer midcap growth, IT resilience, small-cap opportunities, international exposure, or momentum strategies, there’s an ETF for every risk appetite and investment goal.
Remember, the key to success lies in aligning your investment choices with your risk tolerance and financial objectives.ETFs (Exchange Traded Funds) This is not financial advice but simply my perspective for your consideration.