Best Nifty 50 ETFs in India in 2025

What are Nifty 50 ETFs?

A Nifty 50ETF is a market-linked investment that replicates the performance of the Nifty 50 Index. This index comprises 50 of the largest and most liquid stocks listed on the National Stock Exchange (NSE). When investors invest in a Nifty 50 Index ETF, they gain indirect ownership of these top companies, replicating the index’s returns. Unlike actively managed funds, Nifty 50 ETFs simply track the index and are passively managed.

Overview of Best Nifty 50 ETFs

• SBI Nifty 50 ETF: SBI Nifty 50 ETF is an exchange-traded fund designed to track the performance of the Nifty 50 Index. It provides exposure to India’s top large-cap companies across sectors.
• ICICI Prudential Nifty 50 ETF: This ETF mirrors the Nifty 50 Index by holding its constituent stocks in the same proportion. It offers a simple way to participate in India’s large-cap equity segment.
• Kotak Nifty 50 ETF: Kotak Nifty 50 ETF aims to replicate the Nifty 50 Index by investing in the same stocks with matching weights. It provides index-based exposure without active stock selection.
• HDFC Nifty 50 ETF: HDFC Nifty 50 ETF tracks the Nifty 50 Index and gives investors access to a portfolio of major Indian companies, representing multiple sectors of the economy.
• Aditya BSL Nifty 50 ETF: Aditya BSL Nifty 50 ETF seeks to follow the Nifty 50 Index and offers broad-based exposure to large-cap Indian equities through a passively managed structure.

How to Invest in Nifty 50 ETFs in India?

Investing in Nifty 50 ETFs in India is straightforward:

1. Open a demat/trading/stockbroker account. You can open a demat account with smallcase!
2. Investors can use the Tickertape Stock Screener and analyse the Nifty 50 ETF list, and conduct the Nifty 50 ETF comparison to identify the best ETF based on various factors.
3. Place an order to buy the Nifty 50 exchange-traded funds in India of your choice

How to Invest in ETFs in India?

Investing in Nifty 50 ETFs in India is straightforward:

1. Open a Demat Account: Since ETFs trade on the stock exchange, a Demat account with a registered broker is necessary.
2. Choose the Right ETF: Investors can use the Tickertape Stock Screener and analyse the Nifty 50 ETF list to identify the best ETF based on expense ratio, liquidity, and tracking error.
3. Place an Order: ETFs can be bought and sold like regular stocks during market hours.
4. Monitor Performance: Investors should track the Nifty 50 ETF price and make investment decisions based on market conditions and financial goals.

You can also invest in a basket consisting of ETFs via smallcase. Simply go to smallcase.com or the smallcase app, and login via your phone number. Then, go to ‘Discover‘ and enter ‘Nifty ETF’ in the search bar and hit enter. You’ll find an array of portfolios that have Nifty ETFs as a constituent. Just pick the one that fits your investment thesis and click on ‘Invest Now’.

Benefits of Investing in Nifty 50 ETFs

• Diversification: A Nifty 50 ETF fund holds stocks from multiple sectors, which helps spread exposure across different industries rather than focusing on individual companies.
• Lower Expense Ratio: Since Nifty Index ETFs are passively managed, they have lower expense ratios compared to actively managed mutual funds.
• Nifty 50 ETF Liquidity: Nifty 50 ETFs are traded on stock exchanges, which allows buying and selling of units at market prices during trading hours, subject to available liquidity and prevailing market conditions.
• Transparency: Holdings of exchange-traded funds in India closely mirror the Nifty 50 Index, ensuring transparency in asset allocation.
• Market Exposure: Best Nifty 50 ETFs enable investors to participate in the growth of India’s leading blue-chip companies.

Risks Associated with Investing in Nifty 50 ETFs

• Market Risk: The performance of a Nifty 50 ETF fund is directly linked to the stock market, meaning investors may face volatility, which can impact Nifty 50 ETF performance.
• Nifty 50 ETF Tracking Error: Although ETFs aim to replicate the Nifty 50 Index, slight deviations (tracking error) can occur due to fund expenses and market fluctuations.
• Liquidity Risk: While ETFs are liquid, certain funds may experience lower trading volumes, impacting price efficiency.
• Sectoral Impact: The Nifty 50 Index ETF is heavily weighted in sectors like banking, IT, and energy. Any downturn in these sectors could impact the ETF’s performance.

Factors to Consider Before Investing in Nifty 50 ETFs

• Nifty 50 Expense Ratio: ETFs with lower expense ratios deduct less from your returns over time. This fee covers the fund’s operational costs and directly impacts overall Nifty 50 ETF returns.
• Tracking Error: Nifty 50 ETF tracking error measures how closely an ETF follows its benchmark index (like the Nifty 50). A smaller tracking error suggests that the ETF is effectively replicating index performance.
• Fund Performance: Past Net Asset Value(NAV) trends and consistency in performance provide insights into how well the fund has tracked its benchmark and managed volatility.
• Investment Objective: ETFs can vary in risk and time horizon, and investors often select those that best align with their overall financial objectives and investment plans.