Top Sector ETFs in India for ETF Trading in 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.

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

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.

Here's a detailed look at each of these sectoral and thematic ETFs that target specific segments of the Indian market.

ICICI Pru Nifty Auto ETF

The ICICI Pru Nifty Auto ETF tracks companies in India's automotive industry, giving you exposure to car manufacturers, two-wheeler companies, and auto component makers. Launched in January 2022, this fund manages assets worth ₹157.9 crore with a rock-bottom expense ratio of just 0.20%. The ETF has delivered a solid 21.16% return over one year and an impressive 32.43% over three years, while generating 26.40% returns since its inception. If you're bullish on India's automobile sector and electric vehicle transition, this ETF offers a cost-effective way to participate in that growth story.​

Kotak Nifty PSU Bank ETF

Kotak Nifty PSU Bank ETF focuses exclusively on public sector banks, which have seen a remarkable turnaround in recent years. With a substantial AUM of ₹2,190.09 crore and launched way back in November 2007, this is one of the more established sectoral ETFs. The expense ratio stands at 0.49%, which is reasonable for a sectoral fund. Performance has been stellar with 32.13% returns in one year, 26.75% over three years, and an outstanding 37.13% over five years. The 10-year return of 12.17% shows how PSU banks have had their ups and downs, but the recent performance reflects their improved asset quality and profitability.​

Nippon India ETF Nifty India Consumption

Nippon India ETF Nifty India Consumption targets the consumer goods and FMCG sector, tracking companies that benefit from India's rising consumption patterns. Launched in April 2014, it manages ₹203.23 crore with an expense ratio of 0.31%. Returns have been more moderate compared to other sectoral ETFs, 5.95% in one year, 18.34% over three years, and 16.21% over five years. The long-term track record shows consistent returns of 14.11% over 10 years and 14.86% since launch, reflecting the steady nature of consumer-facing businesses.​

ICICI Pru Nifty Infrastructure ETF

The ICICI Pru Nifty Infrastructure ETF gives you access to companies building India's roads, ports, power projects, and urban infrastructure. Launched in August 2022, this relatively new fund has grown to ₹331.78 crore in AUM with a 0.50% expense ratio. It has generated 13.54% returns over one year and 23.07% over three years, with an impressive 21.73% return since launch. With the government's continued push on infrastructure development, this ETF positions you in that long-term growth theme.​

ICICI Pru Nifty IT ETF

ICICI Pru Nifty IT ETF follows India's information technology giants and mid-sized tech companies. Launched in August 2020, it manages ₹553.9 crore with a low 0.20% expense ratio. The IT sector faced headwinds recently, reflected in the -11.66% one-year return, though the three-year and five-year returns remain positive at 11.83% and 9.84% respectively. Since launch, the ETF has delivered 16.43% returns, showing the sector's long-term potential despite short-term volatility.

Mirae Asset Nifty Metal ETF

Mirae Asset Nifty Metal ETF is the newest addition to this list, launched in October 2024, tracking metal and mining companies. With ₹101.38 crore in AUM and a 0.29% expense ratio, it has started strong with a 31.97% return over one year and 10.70% since its launch. Metal stocks are cyclical and commodity-price dependent, making this ETF suitable for tactical allocation when the commodity cycle is favorable.

Motilal Oswal Nifty Realty ETF

Motilal Oswal Nifty Realty ETF focuses on real estate developers and construction companies. Launched in March 2024, it manages ₹204.93 crore with a 0.41% expense ratio. The ETF has faced a challenging start with a -12.22% one-year return and 3.65% since launch, reflecting the cyclical nature and recent consolidation in the real estate sector after a strong rally.

CPSE ETF

The CPSE ETF is a government-backed fund investing in Central Public Sector Enterprises, making it unique among ETFs. With a massive AUM of ₹29,139.78 crore and the lowest expense ratio of 0.07%, it's one of India's largest and cheapest ETFs. Performance has been strong with 7.90% returns over one year, 35.96% over three years, and 35.66% over five years. The 15.71% return since its March 2014 launch demonstrates consistent value creation in government companies.​

Motilal Oswal Nifty Energy ETF

Motilal Oswal Nifty Energy ETF is the absolute newest fund here, launched in October 2025. With just ₹9.68 crore in AUM and a 0.50% expense ratio, it has delivered 1.69% returns since its brief inception. This ETF tracks oil and gas companies, power utilities, and renewable energy firms, giving you diversified energy sector exposure.

Kotak Nifty MNC ETF

Kotak Nifty MNC ETF invests in multinational corporations operating in India, offering exposure to global brands with Indian operations. Launched in August 2022, it has ₹35.94 crore in AUM with a 0.30% expense ratio. Returns have been steady at 8.82% over one year, 16.87% over three years, and 15.60% since launch, reflecting the stable business models of established MNC brands.

Motilal Oswal Nifty India Defence ETF

Motilal Oswal Nifty India Defence ETF taps into India's defence manufacturing and aerospace sector, riding the government's push for self-reliance. Launched in August 2024, it has quickly grown to ₹908.4 crore in AUM with a 0.41% expense ratio. The ETF has delivered 21.29% returns over one year and 9.83% since launch, benefiting from increased defence spending and indigenization initiatives.

ABSL Nifty PSE ETF

ABSL Nifty PSE ETF is another public sector-focused fund launched in May 2024. With ₹28.71 crore in AUM and a low 0.20% expense ratio, it has struggled with 5.80% one-year returns and -1.29% since launch. This ETF provides broad exposure to government-owned companies across various sectors, though it has faced initial challenges in a mixed market environment for PSU stocks.

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 let you trade focused themes with ease. Their transparency, liquidity, and low cost make them ideal for active investors — though concentration risk remains. As India’s growth story unfolds, sector ETFs will continue to help traders capitalize on emerging opportunities with precision.