ETFs, or exchange traded funds, have long been popular with new and experienced investors alike, and for good reason. Like a basket of securities, ETFs allow investors to experience a diverse stock market environment through a single financial channel. Simply put, ETFs are not based on a single performance point like stocks. Instead, they invest in dozens or hundreds of assets to reduce risk and allow users to benefit from overall market performance.

In this article, we have compiled a list of the best ETFs to invest in India in 2022 for Indian investors. While Indian residents can invest in all international ETFs, India Ltd. You can also use India-based ETFs that track the performance of a basket of stocks traded on a national stock exchange. (NSE)

List of top 5 ETFs to invest in India

1. Columbia Indian Consumers Corporation (INCO)

Issue Rate: 0.75%

Columbia India Consumer ETF is considered one of the best ETFs in India due to strong consumer demand for protection. INCO tracks the price and earnings performance of the India Indices Consumer Price Index. This index is a non-float adjusted market capitalization product designed to measure the performance of 30 companies in the consumer sector in India. The fund invests approximately 80% of its net assets in companies listed in the index, and the investment percentage can reach 95%.

According to INCO's most recent sector weighting, more than 72% of the fund's weighting goes to the consumer advocacy sector, and about 27% goes to consumer savvy businesses. The top 5 INCO assets to asset ratios are as follows:

• Titan Co Ltd (7.91%)
• Britannia Industries Limited (7.82%)
• Dabur India Ltd Shs De-Material (7.49%)
• Godrej Consumer Products Ltd De-Mastered (7.46%)
• Hindustan Unilever Limited (7.40%)

The fund has approximately $80 million in net assets and 1,550,000 shares outstanding. The total daily return for 3 years is 10.8%.

2. First Trust India NIFTY 50 Equalweight ETF (NFTY)

Issue Rate: 0.80%

First Trust India NIFTY 50 Equal Weight is another best ETF that tracks the performance of NIFTY 50 Equal Weight Index in India. The index comprises the 50 largest and most liquid Indian companies listed on the National Stock Exchange of India. Moreover, composite stocks are mainly value and growth categories. Please note that the fund invests at least 90% of its net assets in the index above.

NFTY's portfolio contains securities across a variety of sectors, including basic materials, consumer protection, cyclicals, energy, technology and many other sectors, with the financial sector having the largest weighting. According to recent data, the following five holdings have the highest asset ratios in NFTY:

• Bajaj Fin Surf Limited (2.57%)
• Tech Mahindra Ltd. (2.49%)
• Hindalco Industries Ltd. (2.33%)
• Tata Steel Limited (2.33%)
• Bajaj Finance Limited (2.32%)

The fund has approximately $46 million in assets under management and 1 million shares outstanding. The total daily return for 3 years is around 12%.

3. Invesco S&P 500 Low Volatility ETF (SPLV)

Expenditure Rate: 0.25%

The Invesco S&P 500 Low Volatility ETF is currently one of the best ETFs to invest in India due to its defensive approach and low volatility compared to the benchmark S&P 500 index. SPLV monitors investment results   of The S&P 500 Low Volatility Index invests at least 90% of its assets in securities that are part of this index. This index is designed to measure the performance of the 100 least volatile stocks over the past twelve months as determined by the index provider.

SPLV is a well-diversified fund with interests in various sectors. Utilities have the highest weighting in the fund's portfolio, followed by consumer protection, healthcare, financials and industrials. The top 5 holdings in the fund as of 5 October 2022 are:

• Johnson & Johnson JNJ (1.36%)
• Gilead Sciences. Union (1.29%)
• PepsiCo, Inc. PEP (1.25%)
• Bristol-Myers Squibb Company. be (1.21%)
• Berkshire Hathaway Inc. Section BBRKB (1.20%)

The Invesco S&P 500 Low Volatility ETF has approximately $9.77 billion in assets under management and 167 million shares outstanding. Total monthly return is around 3.5% for 3 years and 9% for 5 years.

4. Select the Consumer Staples SPDR ETF (XLP) sector

Expense Rate: 0.10%

Consumer Goods Sector SPDR ETF is one of the best stock market sectors to invest in India. XLP is a consumer-focused ETF that tracks the performance of the Consumer Staples Sector Index. This undivided index includes publicly traded companies classified as "consumer essentials" by GICS.

XLP's portfolio consists of 98.7% of the consumer discretionary segment and 1.29% of the healthcare segment. According to the latest data, the top 5 XLP holdings by percentage of assets are:

• Procter & Gamble BG (14.48%)
• PepsiCo, Inc. PEP (10.75%)
• Coca Cola Co. (10.27%)
• Costco Wholesale Price (9.98%)
• Walmart WMT (4.69%)

The fund has approximately $14.7 billion in net assets and 128 million shares outstanding. The daily 3-year total return is over 5% and the 5-year monthly return is over 7%.

5. Vanguard International Dividend Estimate Corporation (VIGI)

Issue Rate: 0.15%

Vanguard International Dividend Appreciation is a broad foreign sector ETF that tracks the performance of the S&P Global Ex-US Dividend Growers Index. The index measures the investment performance of non-US companies that have consistently increased their profits over time. India is one of the best ETFs to invest in if you want to trade high dividend payers from different parts of the world.

VIGI is a well-diversified fund that includes stocks from various sectors such as healthcare, industrials, technology, telecom services, consumer discretionary and defence. Among the 315 stocks with the highest asset weightings, the top five holdings currently held are:

• Novo Nordisk A/S Class B (4.48%)
• Novartis AG (4.35%)
• Nestle SA (4.19%)
• Tencent Holdings Ltd (3.74%)
• Roche Holdings AG (3.67%)

The fund has more than $3.5 billion in assets under management. Furthermore, VIGI's 3-year total monthly return is close to 3.37%.

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