Top Sector ETFs in India for ETF Trading in 2026

Top Sector ETFs in India for 2026

In 2026, sector ETFs continue to gain strong momentum among active traders who want to ride industry-specific trends with precision. This blog highlights the Top Sector ETFs in India for 2026, helping you identify funds that align with current market dynamics. Whether you’re looking to capture the bullish momentum in banking and IT or seeking defensive stability in FMCG or healthcare, these ETFs let you trade efficiently across focused themes.

Before exploring the best sector ETFs for active trading this year, let’s briefly revisit what they are.

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What Are Sector ETFs?

Sector ETFs (exchange-traded funds) track the performance of specific industries such as banking, technology, pharma, energy, or consumption. Instead of picking individual stocks, traders can use sector ETFs to gain diversified exposure to an entire segment.

Because they trade like shares on stock exchanges, these ETFs offer real-time pricing, transparency, and liquidity, making them powerful instruments for traders aiming to align their strategies with sector-driven market movements.

Top Sector & Thematic ETFs to Watch in 2026

ICICI Pru Nifty Auto ETF

The ICICI Pru Nifty Auto ETF tracks companies in India’s automotive industry, giving exposure to car manufacturers, two-wheeler companies, and auto component makers. Launched in January 2022, the fund manages assets worth ₹157.9 crore with a low expense ratio of 0.20%.

The ETF delivered 21.16% returns over one year, 32.43% over three years, and 26.40% since inception. It offers a cost-effective way to participate in India’s automobile and EV growth story.

Kotak Nifty PSU Bank ETF

Kotak Nifty PSU Bank ETF focuses exclusively on public sector banks. Launched in November 2007, it has a large AUM of ₹2,190.09 crore and an expense ratio of 0.49%.

Performance has been strong with 32.13% returns in one year, 26.75% over three years, and 37.13% over five years. The 10-year return of 12.17% reflects the long-term turnaround in PSU banks.

Nippon India ETF Nifty India Consumption

This ETF tracks consumer goods and FMCG companies benefiting from India’s rising consumption. Launched in April 2014, it manages ₹203.23 crore with a 0.31% expense ratio.

Returns include 5.95% over one year, 18.34% over three years, and 16.21% over five years. Long-term returns of 14%+ highlight the defensive nature of consumption-led businesses.

ICICI Pru Nifty Infrastructure ETF

The ICICI Pru Nifty Infrastructure ETF provides exposure to companies involved in roads, ports, power, and urban infrastructure. Launched in August 2022, it has ₹331.78 crore in AUM and a 0.50% expense ratio.

It has delivered 13.54% one-year returns, 23.07% over three years, and 21.73% since launch, aligned with India’s infrastructure push.

ICICI Pru Nifty IT ETF

This ETF tracks India’s IT majors and mid-sized tech companies. Launched in August 2020, it manages ₹553.9 crore with a 0.20% expense ratio.

While the IT sector faced recent headwinds with a -11.66% one-year return, longer-term performance remains positive with 11.83% over three years and 16.43% since launch.

Mirae Asset Nifty Metal ETF

Launched in October 2024, this ETF tracks metal and mining companies. It has ₹101.38 crore in AUM and a 0.29% expense ratio.

The ETF delivered 31.97% returns over one year and 10.70% since launch, making it suitable for tactical plays during favourable commodity cycles.

Motilal Oswal Nifty Realty ETF

This ETF focuses on real estate developers and construction companies. Launched in March 2024, it manages ₹204.93 crore with a 0.41% expense ratio.

Returns have been volatile with -12.22% over one year and 3.65% since launch, reflecting consolidation after a strong real estate rally.

CPSE ETF

The CPSE ETF invests in Central Public Sector Enterprises and is backed by the Government of India. It has a massive AUM of ₹29,139.78 crore and an ultra-low expense ratio of 0.07%.

Returns stand at 7.90% over one year, 35.96% over three years, and 15.71% since its March 2014 launch.

Motilal Oswal Nifty Energy ETF

Launched in October 2025, this ETF tracks oil & gas, power utilities, and renewable energy companies. It currently has ₹9.68 crore in AUM with a 0.50% expense ratio.

Returns since launch are modest at 1.69%, given its short operating history.

Kotak Nifty MNC ETF

This ETF invests in multinational corporations operating in India. Launched in August 2022, it has ₹35.94 crore in AUM and a 0.30% expense ratio.

It delivered steady returns of 8.82% over one year, 16.87% over three years, and 15.60% since launch.

Motilal Oswal Nifty India Defence ETF

Launched in August 2024, this ETF captures India’s defence manufacturing and aerospace theme. It has grown rapidly to ₹908.4 crore in AUM with a 0.41% expense ratio.

Returns include 21.29% over one year and 9.83% since launch, supported by rising defence spending and indigenisation.

ABSL Nifty PSE ETF

Launched in May 2024, this ETF provides diversified exposure to public sector enterprises. It has ₹28.71 crore in AUM and a 0.20% expense ratio.

Performance has been muted with 5.80% one-year returns and -1.29% since launch.

Conclusion

Sector ETFs in 2026 offer traders a smart way to capture momentum in specific industries without picking individual stocks. From banking and infrastructure to FMCG and defence, these ETFs allow focused theme-based trading with transparency, liquidity, and low costs.

While sector concentration risk remains, India’s evolving growth story ensures that sector ETFs will continue to play a key role for active traders seeking precision and efficiency.