10 Best India ETFs
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In this article, we discuss 10 best India ETFs. If you want to skip our discussion on the Indian economy, head directly to 5 Best India ETFs.
India continues to be one of the world's fastest-growing major economies, especially given the slowing post-pandemic recovery in China. Thamashi De Silva from Capital Economics mentioned that India's GDP data looked strong, even with the Reserve Bank of India implementing policy adjustments. Similarly, India's Chief Economic Adviser, V. Anantha Nageswaran, has upheld his growth projection of 6.5% for the entire year. Nageswaran said:
"Growth prospects appear bright, though external factors pose a downside risk."
S&P Global Market Intelligence noted that India's economy, which experienced rapid growth at 7.2% during the 2022-23 fiscal year, continued to perform strongly in the April-June quarter of 2023, with a year-over-year GDP growth of 7.8%. This was an improvement from the 6.1% growth observed in the January-March quarter of 2023. During the April-June quarter of 2023, private consumption grew by 6% in real terms, a notable improvement from the 2.8% growth recorded in the preceding January-March quarter. Key segments of the service sector, including financial, real estate, and professional services, showed rapid growth, with a 12.2% year-over-year increase in output. Additionally, trade, hotels, transport, and communications services saw a 9.2% year-over-year rise in output. Other economic indicators also pointed to expansionary conditions driven by domestic demand. Steel production increased by 11.9% year-over-year, while steel consumption grew by 10.2% year-over-year. Cement production registered a strong growth, rising by 12.2% year-over-year, and coal production increased by 8.7% year-over-year. Furthermore, sales of commercial vehicles saw a significant rise of 34.3% year-over-year in fiscal year 2022-23, while sales of private vehicles climbed by 18.7% year-over-year during the same period. The index of industrial production, which tends to fluctuate from month to month, displayed a growth of 4.5% year-over-year during the April-June quarter. In the same quarter, manufacturing output saw an increase of 4.7% year-over-year.
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In April 2023, Apple Inc. (NASDAQ:AAPL) inaugurated its stores in India, highlighting the significance of this market for the tech giant's future. The first store, named Apple BKC, is situated in Mumbai, while the second one was launched in the capital, Delhi. As observed by CNBC, the objective of Apple Inc. (NASDAQ:AAPL) is to enhance iPhone sales and manufacturing in India, a strategy resembling its approach when entering China, now one of the company's major markets. Tim Cook, CEO of Apple Inc. (NASDAQ:AAPL), has long regarded India as a key market for the company's future. He expressed optimism about the world's fifth-largest economy, stating that Apple is dedicating a significant amount of effort to this market. Cook even traveled to India for the store's opening ceremony. The CEO of Apple Inc. (NASDAQ:AAPL) stated in a press release:
“India has such a beautiful culture and an incredible energy, and we’re excited to build on our long-standing history.”
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Top leaders from the world's wealthiest nations also convened in New Delhi, India, for the G20 summit held from September 9, 2023, to September 10, 2023. One of the most significant announcements during the event was the unveiling of an economic corridor connecting India, the Middle East, and Europe through rail and sea routes. Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen jointly presented this project, highlighting that the new rail link will accelerate trade between India and Europe by 40%. The Presidents of the United States and India called upon G20 leaders to increase the World Bank's ability to provide loans, offering developing nations an alternative to borrowing from China. The summit in New Delhi focused significantly on strengthening the financial resources and improving the governance of these multilateral lending institutions based in Washington. Narendra Modi, Prime Minister of India, commented:
“We need to expand the mandate of multilateral development banks.”
Despite challenges, all nations ultimately reached a consensus on the joint declaration, marking a diplomatic success for India. Experts view this as a significant foreign policy achievement for Prime Minister Modi, aligning with his efforts to enhance India's global influence. Leading the G20 has offered a year-long opportunity for New Delhi to demonstrate its economic power and attract investment and trade to the world's most populous nation. Additionally, it has provided Modi with a platform to strengthen his domestic standing as he seeks re-election for a third term in the upcoming months.
As per Deloitte insights, India is currently experiencing a favorable economic situation, with its economic activity picking up despite ongoing global uncertainties. Experts and analysts are optimistic about India's economic prospects. They anticipate that India's growth for the fiscal year 2023-24 will fall within the range of 6% to 6.3% and predict an even stronger outlook after that period. In fact, if global uncertainties decrease, they foresee the possibility of growth exceeding 7% in the coming two years.
In this article, we explore some of the best India ETFs, which provide investors with access to companies like APL Apollo Tubes Limited (NSE:APLAPOLLO), Infosys Limited (NYSE:INFY), and ICICI Bank Limited (NYSE:IBN).
Our Methodology
We used an ETF screener and filtered out the best performing India ETFs based on their 5-year performance. We have also discussed the top holdings of the ETFs to offer better insight to potential investors. These ETFs have amassed significant gains in the past 5 years. The list is ranked in ascending order of the 5-year performance of these India ETFs as of September 28, 2023.
Photo by Sylwia Bartyzel on Unsplash
Best India ETFs
10. Columbia India Consumer ETF (NYSE:INCO)
5-Year Performance as of September 28: 29.27%
The Columbia India Consumer ETF (NYSE:INCO) seeks to reflect the price and yield performance of the Indxx India Consumer Index. The index comprises common stocks listed on India's primary exchange. The fund was launched on August 10, 2011. As of September 1, 2023, the net expense ratio stands at 0.75%. The ETF’s portfolio consists of 30 stocks.
Tata Motors Limited (NSE:TATAMOTORS) is the largest holding of the Columbia India Consumer ETF (NYSE:INCO). Tata Motors Limited (NSE:TATAMOTORS) is involved in the design, development, manufacturing, and sale of a range of automotive vehicles. Their product lineup includes passenger cars, sports utility vehicles, intermediate and light commercial vehicles, small, medium, and heavy commercial vehicles, defense vehicles, pickups, buses, trucks, and electric vehicles. Additionally, they provide associated spare parts and accessories. Tata Motors Limited (NSE:TATAMOTORS) markets these products under several brands, including Tata, Daewoo, Harrier, Safari, Fiat, Nexon, Altroz, Punch, Tiago, Tigor, Jaguar, and Land Rover. The company operates across India, China, the United States, the United Kingdom, Europe, and other international markets.
Like APL Apollo Tubes Limited (NSE:APLAPOLLO), Infosys Limited (NYSE:INFY), and ICICI Bank Limited (NYSE:IBN), Tata Motors Limited (NSE:TATAMOTORS) is one of the best Indian stocks to monitor.
9. iShares India 50 ETF (NASDAQ:INDY)
5-Year Performance as of September 28: 32.32%
The iShares India 50 ETF (NASDAQ:INDY) is one of the best India ETFs. It aims to replicate the performance of the Nifty 50 Index. This ETF offers exposure to major companies in India, allowing investors to access a diversified portfolio of the country's largest stocks through a single fund. The fund was launched on November 18, 2009. As of September 28, 2023, the ETF holds net assets worth $667 million, with a portfolio that includes 51 stocks. The expense ratio for this ETF stands at 0.89%.
Reliance Industries Limited (NSE:RELIANCE) is one of the largest holdings of the iShares India 50 ETF (NASDAQ:INDY). Reliance Industries Limited (NSE:RELIANCE) is a global company involved in different sectors, including hydrocarbon exploration and production, oil and chemicals, textiles, retail, digital services, materials, renewables, and financial services. They are known for producing and distributing a range of petroleum products like liquefied petroleum gas, propylene, naphtha, and gasoline, to name a few. Reliance Industries Limited (NSE:RELIANCE) was founded in 1973 and is headquartered in Mumbai, India.
8. Kotak Nifty IT ETF (NSE:KOTAKIT)
5-Year Performance as of September 28: 32.50%
The main objective of the Kotak Nifty IT ETF (NSE:KOTAKIT) is to reflect the NIFTY IT Index's composition and deliver returns in line with the index's performance, while considering tracking errors. This fund was launched on March 2, 2021. As of June 30, 2022, the fund manages assets worth Rs. 133.19 crores, with an expense ratio of 0.22%. The Kotak Nifty IT ETF (NSE:KOTAKIT) is one of the best performing India ETFs.
Tech Mahindra Limited (NSE:TECHM) is one of the largest holdings of the Kotak Nifty IT ETF (NSE:KOTAKIT). Tech Mahindra Limited (NSE:TECHM) offers information technology services and solutions across the Americas, Europe, India, and globally. The company operates through two segments – IT Business and Business Processing Outsourcing. Tech Mahindra was founded in 1986 and is headquartered in Pune, India.
7. WisdomTree India ex-State-Owned Enterprises Fund (NYSE:IXSE)
5-Year Performance as of September 15: 35.32%
The WisdomTree India ex-State-Owned Enterprises Fund (NYSE:IXSE) aims to replicate the investment results of Indian companies that are not classified as state-owned enterprises, where government ownership exceeds 20%. The fund's underlying index, the WisdomTree India ex-State-Owned Enterprises Index, assesses the performance of Indian stocks that fall outside the category of state-owned enterprises. This ETF was launched on April 4, 2019. As of September 28, 2023, the fund's total assets amount to $6.7 million, and it features an expense ratio of 0.58%. WisdomTree India ex-State-Owned Enterprises Fund (NYSE:IXSE)’s portfolio comprises 144 stocks.
Hindustan Unilever Limited (NSE:HINDUNILVR) is one of the largest holdings of the WisdomTree India ex-State-Owned Enterprises Fund (NYSE:IXSE). Hindustan Unilever Limited (NSE:HINDUNILVR), a company specializing in fast-moving consumer goods, produces and markets a range of products in India and around the world. Their product categories include food, home care, personal care, and refreshment items. The company divides its operations into segments, namely Home Care, Beauty & Personal Care, Foods & Refreshment, and Others.
In addition to APL Apollo Tubes Limited (NSE:APLAPOLLO), Infosys Limited (NYSE:INFY), and ICICI Bank Limited (NYSE:IBN), Hindustan Unilever Limited (NSE:HINDUNILVR) is one of the best India stocks to consider.
6. iShares MSCI India ETF (BATS:INDA)
5-Year Performance as of September 28: 36.23%
The iShares MSCI India ETF (BATS:INDA) aims to reflect the performance of the MSCI India Index. This ETF offers exposure to both large and mid-sized companies in India, providing investors with a targeted way to participate in the Indian stock market. It was introduced on February 2, 2012. As of September 28, 2023, the ETF holds assets amounting to approximately $6.05 billion, along with a portfolio of 125 stocks. The expense ratio is set at 0.64%. The iShares MSCI India ETF (BATS:INDA) is one of the best India ETFs.
HDFC Bank Limited (NSE:HDFCBANK) is one of the top holdings of the iShares MSCI India ETF (BATS:INDA). HDFC Bank Limited (NSE:HDFCBANK) delivers banking and financial services to individuals and businesses in India, Bahrain, Hong Kong, and Dubai. The company functions through three segments – Wholesale Banking, Retail Banking, and Treasury Services. HDFC Bank Limited (NSE:HDFCBANK) was founded in 1994 and is headquartered in Mumbai, India.
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Disclosure: None. 10 Best India ETFs is originally published on Insider Monkey.