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Which are the best and worst ETFs of India in Mar-2024?

This article gives an easy to use Excel list of ETFs in India for you to know which ones to avoid and which ones can be considered for investing.

Which are the best and worst ETFs of India in Mar-2024?


Posted on 02 Mar 2024
Author: Sayan Sircar
11 mins read
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This article gives an easy to use Excel list of ETFs in India for you to know which ones to avoid and which ones can be considered for investing.

Which are the best and worst ETFs of India in Mar-2024?

📚 Topics covered:

What is an Exchange Traded Fund (ETF)?

An Exchange Traded Fund (ETF) is a type of mutual fund which has shares that trade intra day on stock exchanges. It holds assets like stocks, bonds, or commodities. You can invest in an ETF by either buying or selling them like any share. If you are investing a large amount at one go, the AMC will offer to sell you a block to ETF shares directly.

We have covered the concept of an ETF and related FAQs in detail here: Exchange Traded Fund FAQs.

This article allows you to see which ETFs currently available in India are good for investing and those which could be avoided. The list of funds below is not exhaustive and only has those funds currently offered by at least two AMCs. If there is a only one ETF to track a particular index, it will likely not show up in the list.

Warning and disclaimer: The point of this article is not to tell you which is the BEST ETF to invest. Instead, it will show you which are the avoidable ones. For this distinction, we have some metrics that we will use to sift through the ETF list. The raw data is sourced from the AMFI and NSE websites and are not guaranteed to be complete, timely or accurate. Users are expected to perform their own due diligence before entering, not entering or exiting these ETFs.

What are ETF screening metrics?

Benchmark returns

Each ETF is a passively managed fund that tracks a particular benchmark like the Nifty 50 (very popular), SENSEX or physical gold price. There are 100+ ETFs in India today tracking more than 80 different benchmarks. The tables show the last 1-year, 2-year, 3-year, 4-year and 5-year benchmark returns.

ETF Price returns

ETFs have a current market price at which trades happen as well as a NAV which is calculated, just like a mutual fund, using the closing stock prices of the trading day. The price calculations use the closing price but a more accurate proxy for the investor’s trading price will likely be the Volume Weighted Average Price (VWAP). It is impossible to estimate the average trading price for any ETF investor and the closing price is taken as an approximate proxy.

ETF investors should always use the iNAV of the fund (from AMC website) to trade or better, if they have the capital, approach the AMC directly to purchase using a creation unit.

ETF NAV returns

Just like price returns, we use NAV data from AMFI to calculate the trailing 1-year, 2-year, 3-year, 4-year and 5-year returns.

Tracking error and tracking difference

Tracking error and tracking difference

Image ©: Vanguard - https://www.ch.vanguard/en/professional/events-education/etfs/management

Just like an index fund, an ETF closely tries to track its benchmark index but does not due to practical considerations including liquidity of the underlying stocks, trading costs for the AMC and the requirement to hold some cash in the portfolio to manage redemptions. The concept of Tracking difference (we can also call it Alpha) is

Tracking difference = Fund return - Benchmark return

The ideal tracking difference is zero. The next best value is a small negative number. Large negative values or some positive values are both matters of concern and avoidable.

In the tables we show both price-based and NAV based tracking differences.

Tracking error = standard deviation of Tracking difference

By definition this is an always positive number and shows you how much the Tracking difference varies around it’s average value. Most AMCs declare tracking errors of their ETFs and index funds. The ideal tracking error is zero and the next best value is a very small number.

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How to interpret the data in the tables?

The data in the tables is for the last 60 months of trading data for the ETF and the benchmarks. Please note the month name in this article’s title and the time period of data is the last 60 months ending on the last trading date of the previous month.

All return numbers are trailing point-to-point returns and are not rolling returns.

We will now show one list of common ETFs as a sample and the complete dataset is available at the bottom of the article.

ETFs tracking the Sensex TRI

Benchmark returns for the Sensex TRI

Benchmark Sensex TRI
BM 1Y 21.60%
BM 2Y 11.78%
BM 3Y 15.20%
BM 4Y 17.29%
BM 5Y 15.84%

ETF Price returns

Fund Fund 1Y Fund2Y Fund 3Y Fund 4Y Fund 5Y
Benchmark 21.60% 11.78% 15.20% 17.29% 15.84%
Average 30.97% 17.39% 16.26% 18.04% 15.80%
BSLSENETFG 24.12% 14.92% NA NA NA
UTISXN50 52.51% 24.73% 21.25% 25.12% NA
UTISENSETF 23.42% 15.09% 13.81% 17.20% 15.42%
LICNETFSEN 23.81% 14.81% 13.73% 11.80% 16.18%

ETF Price-based tracking difference (alpha over benchmark)

Fund Alpha 1Y Alpha 2Y Alpha 3Y Alpha 4Y Alpha 5Y
Average 9.37% 5.61% 1.06% 0.75% -0.04%
BSLSENETFG 2.52% 3.14% NA NA NA
UTISXN50 30.92% 12.95% 6.05% 7.82% NA
UTISENSETF 1.82% 3.30% -1.39% -0.09% -0.41%
LICNETFSEN 2.21% 3.03% -1.47% -5.49% 0.34%

ETF Price-based tracking error

Fund TE 1Y TE 2Y TE 3Y TE 4Y TE 5Y
Average 3.42% 4.81% 3.19% 2.89% 1.30%
BSLSENETFG 2.91% 2.91% NA NA NA
UTISXN50 4.81% 5.71% 3.38% 4.14% NA
UTISENSETF 3.00% 4.99% 2.26% 1.78% 1.22%
LICNETFSEN 2.94% 5.62% 3.94% 2.73% 1.38%

ETF NAV-based return

Fund Fund 1Y (NAV) Fund2Y (NAV) Fund 3Y (NAV) Fund 4Y (NAV) Fund 5Y (NAV)
Benchmark 21.60% 11.78% 15.20% 17.29% 15.84%
Average 31.88% 17.46% 16.66% 20.07% 16.21%
BSLSENETFG 24.53% 14.96% 15.17% 18.66% 16.43%
UTISXN50 54.03% 25.00% 22.13% 25.11% NA
UTISENSETF 24.52% 14.95% 14.20% 17.91% 15.83%
LICNETFSEN 24.43% 14.94% 15.12% 18.61% 16.38%

ETF NAV-based tracking difference (alpha over benchmark)

Fund Alpha 1Y (NAV) Alpha 2Y (NAV) Alpha 3Y (NAV) Alpha 4Y (NAV) Alpha 5Y (NAV)
Average 10.28% 5.68% 1.46% 2.78% 0.38%
BSLSENETFG 2.93% 3.17% -0.03% 1.37% 0.59%
UTISXN50 32.43% 13.22% 6.93% 7.82% NA
UTISENSETF 2.92% 3.17% -1.00% 0.62% -0.01%
LICNETFSEN 2.83% 3.16% -0.08% 1.32% 0.54%

ETF NAV-based tracking error

Fund TE 1Y (NAV) TE 2Y (NAV) TE 3Y (NAV) TE 4Y (NAV) TE 5Y (NAV)
Average 3.64% 6.35% 3.06% 2.51% 1.27%
BSLSENETFG 3.12% 6.10% 2.82% 2.09% 1.53%
UTISXN50 5.18% 6.94% 3.84% 3.68% NA
UTISENSETF 3.12% 6.25% 2.78% 2.14% 1.21%
LICNETFSEN 3.13% 6.12% 2.79% 2.11% 1.08%

ETF Price-NAV difference

Fund Price-NAV 1Y Price-NAV 2Y Price-NAV 3Y Price-NAV 4Y Price-NAV 5Y
Average -0.91% -0.07% -0.89% -2.50% -0.30%
BSLSENETFG -0.42% -0.03% NA NA NA
UTISXN50 -1.52% -0.27% -0.88% 0.00% NA
UTISENSETF -1.10% 0.13% -0.39% -0.71% -0.41%
LICNETFSEN -0.62% -0.13% -1.39% -6.81% -0.20%

You can download the full list of ETFs here: list

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This post titled Which are the best and worst ETFs of India in Mar-2024? first appeared on 02 Mar 2024 at https://arthgyaan.com


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