Top 15 ETFs to buy in the current market conditions

Why have ETFs taken off in the Indian market in such a big way. According to AMFI, the total AUM of ETFs and index funds is now over Rs.2 trillion and growing. ETFs are just like mutual funds, but they are also different. ETFs are mandatorily listed on the stock exchanges and tend to be closed-ended. That means, you cannot approach the fund to sell or redeem units but such units can be bought and sold in the stock markets and held in demat accounts.

What has made ETFs popular? The legendary Jack Bogle famously said “Why look for a needle in a haystack, when you can buy the entire haystack”. What he meant was why to worry about selecting stocks when you can buy the entire market. He meant buying a market representative benchmark like the Nifty or the Sensex. Such representative indices can be purchased through the ETF route. 

Here is why the ETF route is attractive. Typically, global mutual funds have struggled to beat the indices with more than 80% of them doing worse than the index. That trend has now spread to India also. Amidst this uncertainty, ETFs offer a low-cost alternative. The average expense ratio of an ETF is just around 50-70 bps compared to 200-225 bps for an active fund. The advantage is quite clear. Let us look at the best ETFs to buy in this market.

Given below is the list of the 15 best performing ETFs in India on a YTD basis. YTD (year to date) returns have been considered to reflect the FY22 volatility. Not surprisingly, out of the 100 ETFs considered for the ranking, only 20% have given positive returns on a YTD basis with the others giving negative returns.
 

List of top 15 performers among ETFs