Exchange-traded funds have become an increasingly important part of India’s investment landscape. Instead of selecting individual companies, an ETF allows investors to gain exposure to a basket of securities through a single exchange-traded instrument. Depending on the ETF, that basket can represent a broad market index, a sector, a market-cap segment, or an asset such as gold.
The appeal of ETFs has grown alongside the broader adoption of passive investing in India. Investors looking for relatively simple ways to participate in the stock market can use index ETFs to obtain diversified exposure, while more experienced investors can use sector and thematic ETFs to build targeted allocations. India’s ETF market now includes products covering major equity indices, sectors, commodities, debt and other market segments.
For long-term investors, however, choosing an ETF should not be based only on recent returns. Expense ratio, liquidity, assets under management, tracking difference, diversification and the underlying index are all important factors. A low-cost ETF tracking a broad and well-established index can sometimes be more useful for long-term portfolio construction than a narrowly focused fund that has recently delivered strong returns.
Based on diversification, market exposure, liquidity and the role each ETF can play in a long-term portfolio, here are five ETFs worth watching in India in 2026. This is an educational list and should not be considered a recommendation to buy or sell any security.
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1. Nippon India ETF Nifty BeES
Nippon India ETF Nifty BeES is one of India’s best-known Nifty 50 ETFs and provides investors with exposure to the 50 companies that make up the Nifty 50 Index. For investors who want a single ETF representing India’s large-cap equity market, this makes it one of the most straightforward options to research.
The underlying Nifty 50 index provides exposure across major sectors of the Indian economy, including financial services, information technology, energy, automobiles, consumer businesses and healthcare. Instead of attempting to identify which individual large-cap company will outperform, an investor using a Nifty 50 ETF participates in the broader performance of the index.
Nifty BeES is also notable for its scale and trading activity. Nippon India’s fund page reported average assets of approximately ₹65,685 crore and month-end assets of about ₹66,777 crore as of July 31, 2026.
Current market data also shows Nifty BeES among the most actively traded Indian index ETFs. Dhan’s September 2026 data listed Nifty BeES with assets of approximately ₹65,462 crore and daily trading volume of more than 5.3 million units.
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For long-term investors, the main attraction is simplicity. Rather than making repeated individual-stock decisions, investors can use a broad-market ETF to participate in India’s largest listed companies.
The main limitation is that Nifty 50 exposure is concentrated in large companies. Investors looking for greater exposure to emerging businesses and mid-sized companies may need additional ETFs.
2. Nippon India ETF Nifty Next 50 Junior BeES
The Nifty Next 50 represents companies outside the Nifty 50 that rank immediately below the largest 50 companies in the broader Nifty universe. This makes a Nifty Next 50 ETF an interesting complement to a Nifty 50 ETF.
Nippon India ETF Nifty Next 50 Junior BeES is designed to track the Nifty Next 50 TRI through a passive investment approach. The fund invests in securities constituting the underlying index in the same proportion as the index, subject to tracking differences.
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The reason investors may find this category interesting is the different growth profile of the underlying companies. While Nifty 50 companies tend to be established large-cap businesses, Nifty Next 50 companies represent the next segment of large businesses that can potentially become future Nifty 50 constituents.
The ETF category has also experienced substantial growth. NSE’s passive-fund data showed Nippon India’s Nifty Next 50 ETF with assets of ₹7,287 crore in February 2026, up 43.15% year over year. Other Nifty Next 50 ETFs from SBI, UTI, ICICI Prudential and Mirae Asset were also seeing significant asset growth.
The trade-off is higher volatility compared with a broad Nifty 50 allocation. Investors should therefore understand that Nifty Next 50 exposure can behave differently from the Nifty 50 during different market cycles.
For investors building a diversified equity portfolio, however, it can provide exposure to a different group of established Indian businesses.
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3. Nippon India ETF Nifty Midcap 150
For investors willing to accept more volatility in exchange for broader exposure to India’s mid-sized companies, a Nifty Midcap 150 ETF is another category worth researching.
The Nifty Midcap 150 Index consists of 150 companies ranked from 101 to 250 by full market capitalisation within the Nifty 500 universe. As of March 30, 2026, the index represented approximately 18.18% of the free-float market capitalisation of stocks listed on the NSE.
Nippon India ETF Nifty Midcap 150 is one of the listed products tracking this index. Its fund page states that the objective is to provide long-term capital growth through securities replicating the Nifty Midcap 150 Index, subject to tracking error. The fund had approximately ₹3,676 crore in average assets and ₹3,729 crore at month-end as of July 31, 2026.
The mid-cap segment can offer exposure to companies that are smaller than the established large-cap leaders but potentially have greater room to expand. However, this potential comes with higher business and market risks.
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Recent market data illustrates the stronger historical return potential that mid-cap investors have experienced. Dhan’s September 2026 data showed the Nippon Nifty Midcap 150 ETF with a three-year return of about 50% and five-year return of more than 112%, although past performance should not be treated as an expectation of future returns.
For long-term investors, the important point is diversification. A mid-cap ETF can complement large-cap exposure, but investors should be prepared for larger drawdowns during weak market cycles.
4. Nippon India ETF Gold BeES
Not every long-term portfolio needs to consist entirely of equities. Gold can play a different role by providing diversification and exposure to an asset class that does not necessarily move in the same way as Indian equities.
Nippon India ETF Gold BeES is an exchange-traded fund that invests in physical gold and seeks to track domestic gold prices, before expenses and subject to tracking differences. The fund’s stated objective is specifically linked to portfolio diversification through exposure to physical gold.
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The scale of India’s gold ETF market has also increased substantially. Gold BeES was the largest gold ETF by assets in January 2026, with approximately ₹55,124 crore in AUM at the time, according to NSE data reported by The Economic Times.
Gold can serve a different purpose from equity ETFs. Equity ETFs are primarily designed to participate in corporate earnings and economic growth, while gold can act as a diversification asset during periods of market uncertainty, inflation concerns or changes in investor risk appetite.
This does not mean gold will always outperform equities. Its performance can vary significantly depending on global interest rates, currency movements, geopolitical conditions and international gold prices.
For investors considering a diversified long-term portfolio, however, a gold ETF can provide exposure to the precious-metal market without requiring the storage and physical handling associated with owning gold directly.
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5. Nippon India ETF Nifty IT
The fifth ETF on this list provides sector-specific exposure rather than broad-market diversification.
Nippon India ETF Nifty IT tracks the Nifty IT Index and provides exposure to India’s major listed information-technology companies. The fund follows a passive strategy designed to replicate the performance of the Nifty IT TRI, subject to tracking differences.
The Indian IT sector has undergone a significant transformation as cloud computing, artificial intelligence, cybersecurity, digital engineering and enterprise technology spending become increasingly important. Large Indian technology companies are investing heavily in AI capabilities and are helping global businesses implement new technologies.
This makes an IT ETF an interesting way to gain exposure to the sector without selecting a single IT company.
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However, sector ETFs carry greater concentration risk than broad-market ETFs. The performance of an IT ETF can be heavily influenced by global technology spending, currency movements, valuations, hiring trends and demand from major markets such as the United States.
Therefore, investors should view a sector ETF differently from a Nifty 50 ETF. The Nifty 50 can potentially function as a core equity holding, whereas an IT ETF may be more appropriate as a targeted allocation for investors who specifically want technology-sector exposure.
Why These Five ETFs Stand Out
The biggest advantage of these five ETFs is that they represent different parts of a potential long-term portfolio.
Nifty BeES provides broad large-cap Indian equity exposure. Junior BeES expands the portfolio toward the next group of large companies, while a Nifty Midcap 150 ETF provides exposure to a much wider group of mid-sized businesses.
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Gold BeES adds an entirely different asset class, potentially improving diversification, while a Nifty IT ETF provides targeted exposure to one of India’s most important technology sectors.
This combination also highlights why investors should not judge ETFs purely by their recent returns. Each ETF serves a different purpose.
An investor seeking broad market exposure may prioritise a Nifty 50 ETF. Someone seeking greater diversification within Indian equities may consider combining large-cap exposure with Next 50 or Midcap exposure. An investor seeking non-equity diversification may research gold ETFs, while someone specifically bullish on India’s technology sector may look at an IT ETF.
What Investors Should Check Before Buying an ETF
The ETF name alone should never be the deciding factor. Investors should examine the underlying index first because the index determines what the ETF actually owns.
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Expense ratio is another important consideration. Since ETFs are generally designed to track an index, even small differences in costs can matter over long investment periods.
Liquidity is particularly important when buying exchange-traded products. An ETF with higher trading activity and tighter bid-ask spreads can make transactions more efficient.
Tracking difference and tracking error should also be examined. The objective of an index ETF is to replicate its underlying benchmark, but expenses, cash balances, portfolio adjustments and market conditions can cause differences between the ETF and its index.
Finally, investors should consider the role of the ETF in their overall portfolio. Buying multiple ETFs that hold many of the same companies does not necessarily create meaningful diversification.
Final Takeaway
ETFs can provide Indian investors with a relatively simple way to obtain diversified market exposure while maintaining the flexibility of exchange trading. The five ETFs discussed here cover broad large-cap stocks, the next segment of large companies, mid-cap businesses, gold and the technology sector.
Nifty BeES can provide broad exposure to India’s largest companies, Junior BeES adds Nifty Next 50 exposure, and a Nifty Midcap 150 ETF can broaden the portfolio toward mid-sized businesses. Gold BeES offers exposure to physical gold, while Nifty IT provides targeted access to India’s technology sector.
There is no single ETF that is automatically the best for every investor. The right choice depends on investment horizon, risk tolerance, diversification requirements and the role the ETF is expected to play within a portfolio.
For long-term investors, the more important question is therefore not simply “Which ETF has the highest return?” but “Which ETF provides the exposure I actually need at a reasonable cost and with sufficient liquidity?”
Disclaimer: This article is for educational and informational purposes only. The ETFs discussed are examples of Indian exchange-traded funds and should not be considered personal investment recommendations. Investors should review the scheme documents, underlying index, costs, liquidity and risks before investing.
