Best ETFs in India For Jan 2025 Based on 5Y CAGR: CPSE ETF, UTI S&P BSE Sensex ETF and More

Exchange-traded funds (ETFs) have become a favoured choice for Indian investors in recent years. Thanks to a more diverse financial environment and greater access to global markets, ETFs offer a low-cost, simple approach to building a diversified portfolio. Popular with both retail and institutional investors, they track various indices and asset classes while providing flexibility and liquidity.

As passive investing grows, ETFs allow for easy access to a wide range of investment opportunities, all with lower costs and less effort than actively managed funds. In this blog, we will explore the best ETFs in India for Jan 2025.

What are ETFs?

An Exchange-Traded Fund (ETF) is a type of fund that investors can buy and sell on a stock exchange, similar to how they would trade individual stocks. It typically holds a variety of assets, such as stocks, bonds, or commodities, and divides these holdings into shares available to the public. ETFs are created to track the performance of a specific index, sector, or commodity, offering a straightforward method for investors to access either a wide range of markets or specific areas of interest.

Best ETFs For Jan 2025 – Based on 5Y CAGR

Note: The ETFs mentioned above have been selected based on 5Y CAGR as of December 30, 2024.

Overview of Best ETFs in India

1. CPSE ETF

The CPSE ETF, or Central Public Sector Enterprises Exchange Traded Fund, is a government-supported investment fund that holds shares of various central public sector enterprises. This ETF gives investors the chance to invest in prominent PSUs, offering a blend of diversification and the potential for steady returns.

Key Metrics

• 1Y Return: 29.50%
• Benchmark Index: Nifty CPSE Index

2. Bharat 22 ETF

Bharat 22 ETF invests in the 22 companies included in the S&P BSE Bharat 22 Index. The fund seeks to provide returns that closely track the total returns of the index, after expenses, and is subject to market risk.

Key Metrics

• 1Y Return: 20.06%
• Benchmark Index: S&P BSE Bharat 22 Index

3. UTI S&P BSE Sensex ETF

UTI S&P BSE Sensex ETF is a passively managed scheme investing in stocks that endeavour to generate returns in line with the underlying index subject to expenses and tracking error. BSE Sensex Index tracks the performance of the 30 most liquid and established companies listed on BSE.

Key Metrics

• 1Y Return: 10.23%
• Benchmark Index: BSE Sensex Total Return Index

4. Nippon India ETF Nifty Bank BeES

Nippon India ETF Nifty Bank BeES (Formerly Nippon India ETF Bank BeES) aims to provide returns that, before expenses, closely correspond to the total returns of the Securities as represented by the Nifty Bank Index.

Key Metrics

• 1Y Return: 7.31%
• Benchmark Index: NIFTY Bank Total Return Index

Conclusion

ETFs in India present a compelling opportunity for investors of all experience levels to grow their wealth in a diversified, low-cost, and efficient manner. As the investment landscape evolves, ETFs serve as a flexible and accessible tool for those looking to gain exposure to broad market indices, specific sectors, or asset classes, without the complexity of individual stock selection or active portfolio management.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.