Top 15 ETFs to buy in the current market conditions


by 5paisa Research Team Last Updated: 2022-05-21T17:20:40+05:30

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
 

ETF Name

ETF Category

YTD Returns (%)

Expense Ratio (%)

CPSE ETF

Equity - Other

16.11

0.05

BHARAT 22 ETF

Equity - Other

5.81

0.05

SBI ETF Gold

Sector - Precious Metals

5.19

-

Quantum Gold Exchange Traded Scheme

Sector - Precious Metals

5.12

0.78

Nippon India ETF Gold BEES

Sector - Precious Metals

5.09

0.70

HDFC Gold Exchange Traded Fund

Sector - Precious Metals

4.95

0.59

ICICI Prudential Gold ETF

Sector - Precious Metals

4.95

0.50

UTI Gold Exchange Traded Scheme

Sector - Precious Metals

4.83

-

Axis Gold Exchange Traded Fund

Sector - Precious Metals

4.78

0.53

IDBI Gold ETF

Sector - Precious Metals

4.64

0.35

Aditya Birla Sun Life Gold ETF

Sector - Precious Metals

4.55

0.54

Kotak Gold Exchange Traded Scheme

Sector - Precious Metals

4.34

0.55

Invesco India Gold ETF

Sector - Precious Metals

4.07

0.55

BHARAT Bond ETF April 2023 Growth

Short Duration

1.01

-

ICICI Prudential Liquid ETF

Liquid

0.82

0.25

 

Data Source: Morningstar

If you look at the top 15 best performing ETFs on a YTD basis, 11 out of the 15 top performers are gold ETFs, which have gained from the weakness and volatility in the equity markets. The best performers are the government sponsored PSU ETFs, which have done extremely well in the last few months.

There are no equity indices, but there are two debt oriented funds which are at the short end of the yield curve.
 

List of 15 bottom performers among ETFs on a YTD basis
 

ETF Name

ETF Category

YTD Returns (%)

Expense Ratio (%)

ICICI Prudential Midcap 150 ETF

Mid-Cap

-10.04

0.15

Axis Healthcare ETF INR

Sector - Healthcare

-10.24

0.22

ICICI Prudential Midcap Select ETF

Mid-Cap

-11.07

0.15

Mirae Asset Nifty Financial Services ETF

Sector - Financial Services

-11.65

0.12

Aditya Birla Sun Life Nifty Healthcare ETF INR

Sector - Healthcare

-13.33

0.09

ICICI Prudential Healthcare ETF

Sector - Healthcare

-13.65

0.15

ICICI Prudential Alpha Low Vol 30 ETF

Equity - Other

-14.03

0.41

DSP Nifty Midcap 150 Quality 50 ETF

Equity - Other

-14.16

0.30

Nippon India ETF Shariah BEES INR

Equity - Other

-15.37

0.88

Mirae Asset S&P 500 Top 50 ETF

Global - Other

-16.99

0.59

Motilal Oswal Nasdaq Q 50 ETF

Global - Other

-23.43

0.41

Mirae Hang Seng Tech ETF

Global - Other

-24.07

0.50

Axis Technology ETF INR

Sector - Technology

-25.88

0.22

ICICI Prudential IT ETF

Sector - Technology

-26.41

0.20

Mirae Asset NYSE FANG+ETF

Global - Other

-31.52

0.51


Data Source: Morningstar

If you look at the 15 worst performing ETFs on a YTD basis, 4 out of the 15 worst performers are global ETFs, which have lost out on the global weakness, especially on the NASDAQ and especially the FAANG stocks.

The remaining negative performers are the domestic equity plays and these are spread across technology and healthcare funds as well as select mid-cap oriented funds. In short, the ETFs have not done too great due to the volatility in 2022 but the low cost, as can be seen in the table is a big advantage.


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About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Disclaimer

Investment/Trading is subject to market risk, past performance doesn’t guarantee future performance. The risk of trading/investment loss in securities markets can be substantial. Also, the above report is compiled from data available on public platforms.

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