ETFs (Exchange-Traded Funds) are investment funds that trade on stock exchanges like regular stocks. They track indices, commodities, or sectors, offering diversification and lower costs than mutual funds.

ETF vs Index Funds: What's the Difference?

ETFs trade like stocks, with real-time price changes. Index funds, however, are bought/sold at the day's closing price. ETFs offer flexibility, while index funds suit passive investors.

Are ETFs good for beginners?

Yes! ETFs are easy to buy, low-cost, and diversified. They’re a great way to start without picking individual stocks if you're new to investing.

Which ETF should you invest in for long-term growth?

Nifty 50 and Sensex ETFs are good choices. They track India's top companies and have shown steady long-term returns.

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Top 7 ETFs to Invest in for 2025

Archana Chettiar
March 28, 2025

If you’re looking for a smart way to invest in the stock market without picking individual stocks, an ETF to invest in could be your best bet. Exchange-traded funds (ETFs) are gaining popularity in India because they offer diversification, low costs, and ease of trading—just like stocks! But with so many options, how do you choose the right ETF to invest in?

A stock market advisor can help you make better investment decisions, but with the right knowledge, you can confidently choose the best ETF to invest in 2025.

First, let’s understand what are ETFs

An ETF is essentially a basket of securities—like stocks or bonds—that trades on the stock exchange, just like individual stocks. Unlike mutual funds, ETFs offer real-time trading flexibility, lower expense ratios, and diversification across various sectors or indices. They can track benchmarks like the Nifty 50, Sensex, or sector-specific index, making them a popular choice for investors looking for cost-effective and diversified market exposure.

Interested in adding Indian ETFs to your portfolio? Here are seven top options to consider regarding the returns they are likely to deliver.

Top 7 ETFs

CPSE ETF
Nipp Nifty PSU
Kotak Niffty PSU
Bharat 22 ETF
MO Midcap 100
Nipp Nifty Mid
Motilal Oswal NASDAQ 100

Source: MoneyControl

CPSE ETF

Best for: Investors looking for government sector exposure
This ETF tracks a portfolio of public sector enterprises, offering exposure to well-established government-owned companies in India.

Why Invest?

Diversified across major PSU companies.
Lower risk due to government backing.
Historically strong long-term returns.

ETF Name	AUM (Rs. Cr.)	Expense Ratio	1 Year Return	3 Year Return	5 Year Return
CPSE ETF (as of 11/03/25)	33,047.65	0.07%	-4.00%	33.73%	35.64%

Source: Money Control

Insight:

As a government-driven ETF to invest in, this fund benefits from periodic disinvestment initiatives, often leading to improved efficiency and stock appreciation.

2. Nippon India ETF Nifty PSU Bank Bees

Best for: Investors interested in India’s banking sector
This ETF tracks the Nifty PSU Bank Index, offering exposure to India’s leading public sector banks.

Why Invest?

Exposure to top-performing PSU banks.
Strong long-term growth potential.
Ideal for passive investors seeking sectoral diversification.

ETF Name	AUM (Rs. Cr.)	Expense Ratio	1 Year Return	3 Year Return	5 Year Return
Nipp Nifty PSU (as of 11/03/25)	2,307.54	0.49%	-20.36%	31.14%	28.33%

Source: Money Control

Insight:

It is a worthwhile ETF to invest in as it allows you to participate in India’s banking sector expansion, which is supported by financial inclusion policies and rising credit demand.

3. Kotak Nifty PSU Bank ETF

Best for: Investors seeking stability in the financial sector
This ETF focuses on India’s PSU banks, providing an opportunity to invest in key financial institutions.

Why Invest?

Direct exposure to India’s banking sector.
Potential for high returns as PSU banks grow.
Managed by Kotak, a reputable financial institution.

ETF Name	AUM (Rs. Cr.)	Expense Ratio	1 Year Return	3 Year Return	5 Year Return
Kotak NiftyPSU (as of 11/03/25)	1,246.88	0.49%	-20.37%	31.13%	28.26%

Source: Money Control

Insight:

This fund provides a promising opportunity for those seeking an ETF to invest in that benefits from government capital infusion and banking reforms.

4. Bharat 22 ETF

Best for: Investors wanting exposure to a mix of PSU and private companies
This ETF includes stocks from various sectors, including finance, energy, and infrastructure.

Why Invest?

Broad diversification across major Indian industries.
Government-backed companies ensure stability.
Ideal for long-term investors seeking moderate risk.

ETF Name	AUM (Rs. Cr.)	Expense Ratio	1 Year Return	3 Year Return	5 Year Return
Bharat 22 ETF (as of 11/03/25)	16,195.47	0.07%	-5.99%	27.57%	28.86%

Source: Money Control

Insight:

This ETF offers a balanced mix of PSU and private sector firms, making it a unique option for investors seeking stability and growth.

5. Motilal Oswal Midcap 100 ETF

Best for: Investors looking for high-growth midcap companies
This ETF tracks the Nifty Midcap 100 index, which comprises India’s fast-growing midcap companies.

Why Invest?

Higher growth potential compared to large-cap stocks.
Good balance between risk and reward.
Suitable for investors with a long-term horizon.

ETF Name	AUM (Rs. Cr.)	Expense Ratio	1 Year Return	3 Year Return	5 Year Return
MO Midcap 100 (as of 11/03/25)	490.53	0.22%	-0.58%	20.58%	25.89%

Source: Money Control

Insight:

As midcap stocks often deliver superior growth, this ETF is well-suited for investors to capitalize on emerging market leaders.

6. Nippon India ETF Nifty Midcap 150

Best for: Investors seeking diversification in the midcap space
This ETF exposes India’s top 150 midcap companies, offering growth potential across various industries.

Why Invest?

Broad-based exposure to midcap stocks.
Higher return potential compared to large-cap indices.
Suitable for investors with moderate risk appetite.

ETF Name	AUM (Rs. Cr.)	Expense Ratio	1 Year Return	3 Year Return	5 Year Return
Nipp Nifty Mid (as of 11/03/25)	1,756.07	0.21%	0.53%	20.05%	25.73%

Source: Money Control

Insight:

With a broader selection of midcap stocks, this ETF makes sense to invest in as it spreads risk while capturing opportunities in fast-growing industries.

7. Motilal Oswal NASDAQ 100 ETF

Best for: Investors looking for global tech exposure
This ETF tracks the NASDAQ 100 index, providing exposure to leading global tech giants like Apple, Amazon, and Microsoft.

Why Invest?

Gain exposure to top-performing global technology stocks.
Provides portfolio diversification beyond Indian markets.
Ideal for investors looking to hedge against INR depreciation.

ETF Name	AUM (Rs. Cr.)	Expense Ratio	1 Year Return	3 Year Return	5 Year Return
MO NASDAQ 100 (as of 11/03/25)	9,002.38	0.58%	16.13%	18.60%	22.80%

Source: Money Control

Insight:

Investors seeking an ETF benefitting from global innovation trends in AI, cloud computing, and digital transformation should consider this fund.

How to Invest in ETFs in India?

Now that you know the best ETFs for 2025, let’s go over how to invest in them step by step:

Open a Demat and Trading Account: Sign up with a broker like Zerodha, Groww, or Upstox.
Choose an ETF Exchange. ETFs are traded like stocks. You can buy and sell them on platforms like NSE or BSE.
Pick Your ETF to Invest In: Choose an ETF from the list above based on your goals.
Place Your Order: Enter the number of units and place your trade.
Monitor and Rebalance: Keep an eye on your ETFs and adjust your portfolio as needed.

Using tools like a CAGR Calculator can help you track the growth of your investments over time.

Final Thoughts

Choosing the right ETF to invest in depends on your financial goals. If you want market stability, go for a Nifty 50 ETF. If you’re after high growth, try the Nifty Next 50 ETF. Want international exposure? The Nasdaq 100 ETF is a better option.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

FAQ

What are ETFs?
ETFs (Exchange-Traded Funds) are investment funds that trade on stock exchanges like regular stocks. They track indices, commodities, or sectors, offering diversification and lower costs than mutual funds.
ETF vs Index Funds: What’s the Difference?
ETFs trade like stocks, with real-time price changes. Index funds, however, are bought/sold at the day’s closing price. ETFs offer flexibility, while index funds suit passive investors.
Are ETFs good for beginners?
Yes! ETFs are easy to buy, low-cost, and diversified. They’re a great way to start without picking individual stocks if you’re new to investing.
Which ETF should you invest in for long-term growth?
Nifty 50 and Sensex ETFs are good choices. They track India’s top companies and have shown steady long-term returns.

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Archana Chettiar

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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.