Top Nifty Financial Services ETF in India (2026)

The Nifty Financial Services Index tracks listed companies from India’s financial services sector. It includes banks, NBFCs, housing finance companies, insurance companies, asset management companies and other financial institutions. The index is used to measure how India’s financial services sector is performing in the stock market.

Nifty Financial ETFs in India are passive exchange-traded funds that track the Nifty Financial Services Index. These ETFs invest in the same companies as the index in similar weightages, subject to tracking error and expenses. They offer exposure to India’s financial services sector through a single listed instrument.

1. Mirae Asset Nifty Financial Services ETF: Mirae Asset Nifty Financial Services ETF is a passive fund that tracks the Nifty Financial Services Index. It offers exposure to listed financial services companies, including banks, NBFCs, insurance, housing finance and asset management businesses, subject to tracking error and market movements.
2. ICICI Pru Nifty Financial Services Ex-Bank ETF: ICICI Pru Nifty Financial Services Ex-Bank ETF tracks the Nifty Financial Services Ex-Bank Index. It provides exposure to financial services companies, excluding banks, such as NBFCs, insurers, housing finance companies, and other financial institutions, subject to tracking error, expenses, and sector-specific risks.

Investing in Nifty Financial ETF 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 to analyse the Nifty Financial Services ETF list and compare them to identify the best Nifty Financial ETF in India based on various factors.
3. Place a buy order.

The tax treatment of Nifty Financial Services ETFs depends on their asset allocation and holding period. Since these ETFs mainly invest in domestic equity shares, they are generally taxed as equity-oriented funds.

• Short-Term Capital Gains: If Nifty Financial Services ETF units are sold within 12 months, the gains are treated as short-term capital gains. These gains are taxed at 20%.
• Long-Term Capital Gains: If the units are held for more than 12 months, the gains are treated as long-term capital gains. Long-term capital gains above ₹1.25 lakh are taxed at 12.5%.
• Dividend Taxation: Any dividend received from Nifty Financial Services ETFs is taxed as per the investor’s applicable income tax slab.

• Targeted BFSI Exposure: These ETFs provide access to India’s financial services sector through a single listed product. The Nifty Financial Services Index covers banks and non-bank financial companies, while the Ex-Bank index focuses on non-bank financial institutions.
• Bank vs Non-Bank Choice: Investors can choose between broad financial services exposure via Mirae Asset Nifty Financial Services ETF and bank-free exposure via ICICI Pru Nifty Financial Services Ex-Bank ETF, depending on the index they want to track.
• Reduced Single-Stock Dependence: The Nifty Financial Services Index spreads exposure across 20 companies. Although large banks carry significant weight, the ETF still provides access to multiple financial institutions rather than relying on a single stock.
• Transparent Portfolio: Since these ETFs track published indices, investors can see the constituents and weights. This makes it easier to know whether the ETF is driven more by banks, NBFCs, insurers or capital-market-linked companies.
• Exchange-Traded Liquidity: Units of these ETFs trade on stock exchanges during market hours. This allows investors to enter or exit during the trading day, subject to market liquidity, the bid-ask spread, and the availability of buyers and sellers.

• Sector Concentration: These ETFs focus only on financial services. If banks, NBFCs, insurers, or capital-market-linked companies underperform together, the ETF may also decline, unlike broader-market ETFs with exposure across sectors.
• Top-Stock Concentration: The Nifty Financial Services Index had HDFC Bank and ICICI Bank together at over 33% of the index weight in 2026. Large moves in these stocks can significantly affect the Mirae Asset Nifty Financial Services ETF.
• Ex-Bank Concentration: The Ex-Bank index had Bajaj Finance, BSE and Shriram Finance among its top weights in 2026. This means ICICI Pru Nifty Financial Services Ex-Bank ETF may be more sensitive to NBFC and capital-market cycles.
• Valuation Risk: As of 30th June, 2026, the Nifty Financial Services Index traded at a P/E of 15.20, while the Nifty Financial Services Ex-Bank Index traded at a higher P/E of 22.64. Higher valuations can make returns more sensitive to earnings disappointments.
• Tracking Error Risk: ETF returns may differ from index returns due to expense ratio, cash holdings, rebalancing and market liquidity. Mirae Asset Nifty Financial Services ETF reported a tracking error of 0.06% as of 4th July 2026.
• Regulatory Risk: Financial services indices are also affected by regulatory changes. In 2025, SEBI announced the restructuring of derivative-linked indices, including Nifty Financial Services, to broaden their composition and reduce the risk of manipulation.

• Index Tracked: Mirae Asset Nifty Financial Services ETF tracks the broader Nifty Financial Services Index, while ICICI Pru Nifty Financial Services Ex-Bank ETF tracks the ex-bank version. This leads to different portfolio compositions.
• Bank Exposure: The Mirae Asset ETF includes major banks such as HDFC Bank, ICICI Bank, SBI and Axis Bank, making its performance linked to banking sector movements.
• Non-Bank Exposure: The ICICI Pru Ex-Bank ETF excludes banks and includes NBFCs, insurers, housing finance and capital-market-linked companies. This gives it a different financial services exposure.
• Top Holdings: The Nifty Financial Services Index is influenced by large banks, whereas the Ex-Bank index has greater exposure to companies such as Bajaj Finance, BSE, and Shriram Finance.
• Valuation Level: Financial services ETFs may trade at different valuation levels depending on the underlying index. This can affect how sensitive the ETF is to changes in earnings.
• Tracking Error: ETF returns may differ from the index due to expenses, cash holdings, portfolio rebalancing and market liquidity.
• Liquidity and Spreads: Since ETF units trade on exchanges, trading volume and bid-ask spreads can affect buying and selling prices.