For most Indian investors, a Nifty 50 ETF is the first ETF they buy. It is cheap and easy to trade. But it covers only India's 50 largest companies. AMFI counted 267 equity ETFs at the end of August 2026, tracking large, mid and small companies, single sectors, investing styles and US indices. This guide explains the main groups beyond the Nifty 50, with data to September 2026.
What an Equity ETF Is
An ETF (exchange-traded fund) is an open-ended fund that copies an index and must keep at least 95% of its money in that index's securities (SEBI circular, 26 February 2026). Its units trade on the stock exchange, so you need a demat account. The price moves through the day, while the NAV (net asset value) is struck once a day. SEBI requires every ETF to have at least two market makers, brokers who quote buy and sell prices to keep the ETF's price close to its value, and the AMC must publish an indicative NAV (iNAV) during trading hours.
An index fund tracks the same kind of index but is bought from the fund house at the day's NAV, without a demat account. For a full comparison, see ETF vs mutual fund vs index fund.
The Main Groups
Nifty Next 50
The 50 large companies just below the Nifty 50, such as Adani Power, DLF, ABB India, Bajaj Holdings and GAIL (constituent list, 28 September 2026). Over 15 years to 31 August 2026 the Nifty Next 50 TRI returned 15.50% a year against 12.40% for the Nifty 50, a lead of about 3 percentage points. The lead depends heavily on the start date: across rolling 15-year windows starting between 2005 and 2011 it ranged from about 0.7 to 4.9 points. It is also more volatile. Holding a Nifty 50 and a Next 50 ETF together covers the same 100 companies as the Nifty 100.
Midcap and smallcap
Nifty Midcap 150 and Nifty Smallcap 250 ETFs cover the next layers of listed companies. Over the 10 years to 31 August 2026 their TRIs returned 17.51% and 15.08% a year. The falls have been deep: roughly 39% and 44% in the 2020 crash, and smallcaps fell about 60% from January 2018 to March 2020.
A common worry is that these ETFs track their index poorly. AMFI data says otherwise. One-year tracking error (a measure of how steadily a fund follows its index) on 25 September 2026 was 0.04–0.17% for Midcap 150 ETFs and 0.08–0.32% for Smallcap 250 ETFs. SEBI's 2% limit is a ceiling, not the norm.
Sector ETFs
A Bank Nifty ETF is a concentrated bet on banking. Its five largest holdings on 31 August 2026 were HDFC Bank (17.02%), ICICI Bank (14.86%), SBI (10.27%), Kotak Mahindra Bank (9.88%) and Axis Bank (9.20%). There are also IT, pharma, PSU bank and CPSE ETFs. A single sector can stay out of favour for years, so these work best as small add-ons rather than a core holding. See when to use sector funds.
International ETFs
Indian-listed ETFs such as Motilal Oswal Nasdaq 100 ETF (MON100) let you buy US shares in rupees on an Indian exchange, without sending money abroad under LRS. MON100's NAV grew 24.02% a year over 10 years to 31 August 2026 (in rupee terms).
The big risk here is the price you pay. SEBI caps how much Indian mutual funds can invest overseas, and the separate limit for overseas ETFs has been reported as used up, so AMCs are not creating new units. With demand but no new supply, these ETFs trade above their NAV. Business Today reported MON100 at a 19.2% premium on 26 April 2026; on 27 September 2026 its price was about 13% above its last NAV. If you buy at a premium and it later shrinks, you lose that amount even if the Nasdaq does not move. Check the price against the iNAV before buying.
Factor (smart beta) ETFs
These track rules-based indices built on low volatility, momentum, quality, value or equal weight. They can do well for years and then trail the market for long stretches. See our guide to smart beta and factor ETFs.
Returns and Worst Falls
| Index | 10 years (a year) | 15 years (a year) | 2008 fall | 2020 fall |
|---|---|---|---|---|
| Nifty 50 | 11.95% | 12.40% | −59.5% | −38.3% |
| Nifty Next 50 | 13.53% | 15.50% | −72.1% | −36.2% |
| Nifty Midcap 150 | 17.51% | 18.21% | −72.9% (back-tested) | −38.5% |
| Nifty Smallcap 250 | 15.08% | 15.65% | −75.6% (back-tested) | −43.5% |
| Nasdaq 100 in rupees (MON100 NAV) | 24.02% | n/a | n/a | −25.0% |
Returns are total return index (TRI) CAGRs to 31 August 2026 from NSE Indices; Smallcap 250 is calculated from NSE's TRI series. Falls are peak to trough, calculated from NSE TRI daily values. The Midcap 150 and Smallcap 250 were launched in April 2016, so their 2008 figures are back-tested. MON100's largest fall was −30.1% (December 2021 to June 2022). Past returns do not predict future returns.
Costs and Tracking: Selected ETFs
| ETF | NSE symbol | Expense ratio | AUM (₹ Cr) | Tracking error |
|---|---|---|---|---|
| SBI Nifty 50 ETF | SETFNIF50 | 0.045% | 2,13,794 | 0.02% |
| Nippon India ETF Nifty 50 BeES | NIFTYBEES | 0.04% | 67,095 | 0.02% |
| Nippon India ETF Nifty Next 50 Junior BeES | JUNIORBEES | 0.22% | 8,969 | 0.05% |
| SBI Nifty Next 50 ETF | SETFNN50 | 0.15% | 3,058 | 0.05% |
| ICICI Prudential Nifty Next 50 ETF | NEXT50IETF | 0.15% | 2,720 | 0.13% |
| Nippon India ETF Nifty Midcap 150 | MID150BEES | 0.24% | 4,063 | 0.15% |
| Mirae Asset Nifty Midcap 150 ETF | MIDCAPETF | 0.12% | 1,874 | 0.05% |
| HDFC Nifty Smallcap 250 ETF | HDFCSML250 | 0.26% | 2,691 | 0.08% |
| Nippon India ETF Nifty Bank BeES | BANKBEES | 0.20% | 8,397 | 0.04% |
| Motilal Oswal Nasdaq 100 ETF | MON100 | 0.60% | 13,815 | 0.20% |
Expense ratio is AMFI's total expense ratio, 22–28 September 2026. AUM from sharpely.in, 27 September 2026. Tracking error is AMFI's one-year figure, 25 September 2026. Not every ETF in a category is cheap: some Next 50 and Smallcap 250 ETFs charge over 0.9%.
ETF or Index Fund?
The largest Nifty 50 ETFs charge 0.03–0.05%, against about 0.10% for the cheapest Nifty 50 index fund (direct plan). But an ETF adds costs an index fund does not: brokerage (zero for delivery at some brokers), the bid-ask spread and any premium to NAV. Securities transaction tax (STT) on equity ETFs is 0.001% and is charged only when you sell.
An index fund is often simpler if you invest a fixed amount every month, don't want to place exchange orders, or are buying a small or thinly traded category where spreads can be wide. Compare the two with our ETF vs index fund calculator.
How ETFs Are Taxed
| ETF type | Held 12 months or less | Held more than 12 months |
|---|---|---|
| Indian equity ETF (Nifty 50, Next 50, midcap, smallcap, sector) | 20% | 12.5% on gains above ₹1.25 lakh a year |
| International equity ETF listed in India (e.g. Nasdaq 100) | Your slab rate | 12.5%, with no ₹1.25 lakh exemption |
For units sold on or after 1 April 2025; carried into the Income-tax Act, 2025. Surcharge and cess extra. Sources: SBI Mutual Fund tax reckoner FY 2026-27; TaxGuru, 6 April 2026.
Many older articles still say international ETFs are taxed at slab rate however long you hold them. That was true for a period, but not for units sold from 1 April 2025.
What to Check Before Buying
- Expense ratio and tracking error against other ETFs on the same index.
- Price versus iNAV. Small ETFs and international ETFs can trade away from their value.
- Bid-ask spread and trading volume. Thin trading means wider spreads.
- Fund size. Very small ETFs may be merged or closed.
This guide explains how these ETFs work and compare. It is not a recommendation to buy any specific fund.