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Best India ETF UK – Compare Top ETFs 2021

Emerging market funds are expected to surge higher over the next few years as economies start to return to normal operations after the pandemic recovery. In particular, India ETFs (exchange-traded funds) have gained the interest of analysts and investors all over the world due to the country’s long-term growth potential and untapped demographic.

But what is the best India ETF UK to invest in? How can you invest in the best India ETFs 100% commission free? In this ‘Best India ETF UK Guide,’ we answer all of these questions and more! 

Best India ETF UK 2021 List

If you’re looking for a shortlist of the best India ETFs to invest in then look no further. Below is a list of the top ETFs in India to focus on right now that track Indian equities listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (SENSEX). 

  1. iShares MSCI India ETF – Access the Largest & Midcap Indian Equities –  Invest now
  2. Xtrackers MSCI India Swap UCITS ETF – Track the Performance of the MSCI India TRN Index – Invest now
  3. Franklin FTSE India ETF – Track the Performance of the FTSE India 30/18 Capped Index – Invest now
  4. WisdomTree India Earnings Fund – Track the Performance of India’s Profitable Companies
  5. iShares MSCI India Small-Cap ETF – Gain Exposure to Indian Small-Cap Companies
  6. First Trust India NIFTY 50 Equal Weight ETF – Access Large-Cap Funds on the Nifty 50 Index
  7. Invesco India ETF – Track the Performance of the FTSE India Quality & Yield Select Index
  8. VanEck India Growth Leaders ETF – An India ETF Focused on Growth Companies
  9. Direxion Daily MSCI India Bull 2X Shares – Leverage the Performance 2X the Indus India Index
  10. HDFC Mutual Fund – Best Gold ETF India Alternative Play

Each of these India ETFs will track a benchmark index. The prospectus will also provide details such as the expense ratio, net asset value (NAV), the allocation of equities in the fund, how dividends are paid out, the ESG rating, the long-term total return and a disclaimer for investing. 

There are also other related ETF options such as investing in the best gold ETF India like the HDFC mutual fund. As gold is one of the biggest commodities in India, it’s another type of exposure to the country. 

Best India ETFs UK Reviewed

Now let’s take a look at each India ETF in more detail to learn about the stock market index and index funds they track, as well as their assets under management and year returns since inception. 

1. iShares MSCI India ETF – Access the Largest & Midcap Indian Equities 

iShares is an ETF provider owned by the world’s largest asset management company BlackRock. This is why the iShares MSCI India ETF (ticker INDA) is arguably one of the most popular ways to gain exposure to the Indian stock market. 

The aim of the ETF is to track the price and yield performance of the MSCI India Index which is comprised of around 85% equities from the Indian stock market.  The ETF is designed to give investors exposure to the Indian economy from just one investment. 

The iShares MSCI India ETF has 101 holdings and a low expense ratio of 0.69%. Some of the biggest holdings in the ETF include Reliance Industries (RELIANCE), Infosys Ltd (INFY), ICICI Bank (ICICIBANK), Tata Consultancy Services (TCS) and many others. 

ishars msci india etf chart

The price action growth of the iShares MSCI India ETF since inception has been very strong, although quite bumpy. A $10,000 investment when the fund started in 2011 would now be worth more than $20,000. 

This is why the India ETF iShares product is one of the most popular. There are also other iShares ETFs available such as the iShares Index ETF, known as the iShares India ETF and the iShares India 50 ETF. The iShares India 50 ETF is named this way because it tracks the performance of the 50 largest Indian companies. 

68% of retail investor accounts lose money when trading CFDs with this provider.

2. Xtrackers MSCI India Swap UCITS ETF – Track the Performance of the MSCI India TRN Index

The xTrackers MSCI India Swap ETF (XCX5) aims to reflect the performance of large and mid-cap companies in India and covers around 85% of the Indian stock market. While the fund is domiciled in Luxembourg it is priced in US dollars (USD) and is also available as a tracker fund on the London Stock Exchange in British pounds (GBP). 

Around 25% of the fund is invested in financial companies like House Development Finance, ICICI Bank, Axis Bank and Bajaj Finance. Around 18% of the fund is invested in Information Technology companies like Infosys with around 12% invested in energy companies. 

xtrackers msci india swap etf price chart

In the price chart of the xTrackers MSCI India Swap ETF shown above from the eToro trading platform, it’s clear to see the huge recovery in the fund’s price after the pandemic-led sell-off. 

While most global stock markets have rallied higher since the sell-off, emerging market funds have become increasingly more popular due to their growth prospects. 

68% of retail investor accounts lose money when trading CFDs with this provider.

3. Franklin FTSE India ETF – Track the Performance of the FTSE India 30/18 Capped Index

The Franklin FTSE India ETF (FRIN) is domiciled in Ireland and invests in large and mid-cap stocks in India. The aim of the fund is to track the performance of the FTSE India 30/18 Capped Index. 

The FTSE India 30/18 Capped Index is a market cap-weighted index that limits over-concentration in any single security. This is achieved by a quarterly capping procedure so the largest company’s market cap weight in the index fund does not exceed 30%, while any remaining company weight does not exceed 18%. 

The fund holds some of the biggest companies in India. Oil, gas and coal company Reliance Industries has the biggest weighting to the fund at 9.76%. Software and computer services company Infosys has a weighting of 7.51%. Finance and credit services company Housing Development Finance has a weighting of 5.99%. 

frankling ftse india etf performance chart

The long-term investment performance of the Frankling FTSE India ETF since its inception in June 2018 has been fairly steady with the fund’s NAV up 28.20% and a very Sharpe ratio of 3.14. 

68% of retail investor accounts lose money when trading CFDs with this provider.

4. WisdomTree India Earnings Fund – Track the Performance of India’s Profitable Companies

The WisdomTree India Earnings Fund (EPI) is a fundamentally weighted index that attempts to gauge the performance of profitable companies in India’s stock market. Each company is weighted individually according to a valuation methodology. This differs from many other funds which are weighted by market capitalisation. 

The fund focuses on large-cap companies listed on the NSE or SENSEX stock exchanges. However, most of the holdings are in the financial, information technology and materials sectors with the top three holdings including Reliance Industries, Infosys and Housing Development Finance Corp. 

wisdomtree india fund chart

The WisdomTree India Earnings Fund’s share price has remained fairly range based over the past ten years trading in between $25 and $15. However, the post-pandemic recovery has helped lift the fund to a new record high of nearly $40 per share so it’s an ETF in India to watch. 

68% of retail investor accounts lose money when trading CFDs with this provider.

5. iShares MSCI India Small-Cap ETF – Gain Exposure to Indian Small-Cap Companies

Another top ETF India is the iShares MSCI India Small-Cap ETF (SMIN). The aim of this ETF is to give investors exposure to small public companies in India, targeting small-cap stocks. 

The ETF aims to track the benchmark index MSCI India Small Cap Index and has 261 holdings. Some of the top holdings include Tata Power, SRF Ltd, Godrej Properties, Mindtree, Zee Entertainment Enterprises and many others. 

It’s worthwhile knowing that the biggest holding in the fund, around 3.7% is allocated to the BlackRock Cash Funds Treasury SL Agency (XTSLA). This fund has 99.5% of its assets in cash, U.S. Treasury bills and notes. 

iShares msci india small cap etf chart

Since inception, the fund has performed well but has also exhibited a much higher level of volatility than other India ETF iShares products and India ETF UK products as a whole. This makes sense as small cap companies are still growing and can have a volatile share price. 

If you invested $10,000 when the fund first opened it would have grown to nearly $30,000. 

68% of retail investor accounts lose money when trading CFDs with this provider.

6. First Trust India NIFTY 50 Equal Weight ETF – Access Large-Cap Funds on the Nifty 50 Index

The First Trust India NIFTY 50 Equal Weight ETF is a large-cap fund that aims to track the performance of the NIFTY 50 Equal Weight Index. This index holds 50 of the largest Indian stocks listed on the National Stock Exchange (NSE) but gives them all on equal weighting, rather than a traditional market-cap weighting. 

The fund is mainly invested in the financial services, consumer cyclical and basic materials sectors. The top ten holdings of the fund include companies such as Tata Steel, JSW Steel, Wipro, UPL, Asian Paints and others. 

first trust nifty equal chart

The First India Nifty 50 Equal Weight ETF has had a very rocky and volatile journey. The share price has exhibited some sharp swings both up and down since its inception. 

However, since the post-pandemic recovery period, the share price has been surging higher and is now up more than 60%. This is an India ETF to watch if the growth from the pandemic recovery can continue. 

68% of retail investor accounts lose money when trading CFDs with this provider.

7. Invesco India ETF – Track the Performance of the FTSE India Quality & Yield Select Index

The Invesco India ETF is also known as the PowerShares India Portfolio and is based on the Indus India Index. Around 90% of the assets are invested in securities that comprise the Index as well as American Depositary Receipts (ADRs). 

The fund holds 51 securities in the portfolio that are the largest companies from the National Stock Exchange (NSE) and the Bombay Stock Exchange (SENSEX). The fund is supervised by specialists in the emerging markets field. 

Some of the biggest holdings in the fund include Infosys, Reliance, Hindustan Unilever, Sun Pharmaceuticals, Bharti Airtel and others. 

Invesco India ETF chart

The fund has not performed that well since its inception. In fact, it has spent much of the time in the negative. But this is in line with the Indus India Index. Since 2014, the fund has been a better winning streak and has been rising steadily so it is an India ETF to watch if emerging markets continue to trend higher. 

68% of retail investor accounts lose money when trading CFDs with this provider.

8. VanEck India Growth Leaders ETF – An India ETF Focused on Growth Companies

The VanEck India Growth Leaders ETF (GLIN) provides unique exposure to growth based companies in India. VanEck uses a special algorithm that calculates a daily average weighted score for each company based on four fundamental factors: growth, profitability, cash flow and value. 

The fund holds 82 securities. Some of the biggest holdings include Tata Consultancy Services, Infosys, Asian Paints, Wipro and Divi’s Laboratories. The aim of the fund is to track the price and yield performance of the MarketGrader India All-Cap Growth Leaders Index. 

vaneck india growth leaders etf chart

Since its inception, the fund has performed terribly. A $10,000 investment at the launch of the fund fell to $3,000. However, the post-pandemic recovery has led to a recent surge higher making it an India ETF to watch if it can get back toward the price when it first launched. 

68% of retail investor accounts lose money when trading CFDs with this provider.

9. Direxion Daily MSCI India Bull 2X Shares – Leverage the Performance 2X the Indus India Index

The Direxion Daily MSCI India Bull 2X Shares ETF is unique as it provides leveraged exposure to the performance of the Indus India Index. Essentially, it provides 2x daily long leverage to the index.

This makes the index more ideal for shorter-term investors as the leveraged effect helps to amplify moves higher and lower. The fund’s factsheet specifically states it is high risk and is not for those with a low-risk tolerance or a buy and hold strategy. 

The fund’s holdings include the iShares MSCI India ETF, the Goldman Sachs FS Treasury Instruments Fund and the Dreyfus Government Cash Management mutual fund. 

direxxion india etf chart

The fund itself has performed poorly since its inception. But it has moved off its all-time lows and could start a new trend higher as more capital moves into emerging markets and the Indian economy in particular. 

68% of retail investor accounts lose money when trading CFDs with this provider.

10. HDFC Gold Mutual Fund – Best Gold ETF India

The HDFC Mutual Fund is one of the best gold ETFs India has to offer. The gold ETF is traded on the Indian stock market and offers an interesting way to capitalise on gold via India. 

If investors want to capitalise on the rise of the Indian stock market then most funds traded on those stock exchanges are likely to benefit as well. This will hold true of the HDFC Mutual Fund too. 

hdfc gold mutula fund chart

However, this fund will also be affected by gold prices. The most ideal scenario is to catch a period of time where gold prices are rising at the same time as the Indian stock market. In this scenario, the HDFC Gold Mutual Fund could put in an impressive performance.  

68% of retail investor accounts lose money when trading CFDs with this provider.

India ETFs Explained 

An ETF, or exchange traded fund, is a security that tracks an index, commodity, sector or theme, through just one investment. For example, an India ETF would track the performance of shares listed on India’s stock exchanges. 

Usually, the ETF would use a benchmark index like the NIFTY 50 Index which is an index of the largest 50 shares listed on the Indian stock exchange. The ETF would buy the individual stocks to mirror the index. 

This helps investors in multiple ways. Firstly, you don’t need to buy all 50 stocks in the index yourself. You only need to make one purchase which is the India ETF which will give you exposure to the performance of all 50 stocks. 

Therefore, investors can focus all of their efforts and research on the global theme the ETF is tracking. This is why ETFs have grown exponentially in the last few years and are very popular among investors. 

Are India ETFs a Good Investment?

It’s important to know some of the pros and cons of investing in India ETFs before you start. This will help you to tailor your investments to your portfolio and risk tolerance. 

Pros of India ETFs

  • India ETFs provide a passive way to invest in India without spending lots of time trying to research and find the best individual company to invest in. 
  • The buying and selling of India ETFs are very simple as they trade like a stock on a stock exchange. 
  • ETFs tend to have low management fees and you can buy them through top-rated brokers like eToro 100% commission-free.

Cons of India ETFs

 

  • There is no Vanguard India ETF just yet but plans are in the making. Vanguard is seen as the top ETF provider but has yet to provide an India ETF Vanguard product. 
  • Some India ETFs are leveraged. This amplifies the moves higher and lower so comes with greater volatility. 

Where to Buy India ETFs

Choosing the right broker to invest in India ETFs is essential. Not only do you want to make sure you are investing with the lowest fees possible, but you also want to make sure they are safe and secure. 

Below are two top-rated brokers to invest in India ETFs. 

1. eToro – Overall Best India ETF Broker

etoro logoeToro is a broker that offers a high level of safety and peace of mind as they are authorised and regulated all over the world including from the UK FCA, CySEC, ASIC and FINRA. 

Furthermore, you can invest in stocks and ETFs 100% commission free! This means you can keep more of your profits from your investments. 

The eToro offering is huge. You can invest in stocks and ETFs from all over the world and trade in currencies, indices, commodities and cryptocurrencies through the feature-rich and simple to use web platform. 

eToro platform

More than 20 million people use the eToro platform as they are also the largest social trading and copy trading platform in the world. You can find other profitable traders and have their trades copied onto your own account. 

The eToro Investment Committee has also created CopyPortfolios. These are ready-made portfolios that track certain themes and are similar to ETFs. For example, themes include Cryptocurrency, DroneTech, CyberSecurity, GoldenEnergy. 

These portfolios will hold stocks and ETFs that fit them. But you can invest at the click of a button and gain exposure to the overall basket. 

eToro copy portfolio

It only takes a few minutes to open an account with eToro with a minimum of $200. There are no deposit fees and you can use bank transfer, credit/debit card or PayPal. 

Pros:

  • Fully regulated by FCA, ASIC and CySEC
  • Access 2,400+ global markets
  • Copy profitable traders through CopyTrader
  • Invest in ready-made baskets via CopyPortfolio
  • Fee-free deposits via bank transfer, debit cards, PayPal
  • 100% commission-free stock trading!

Cons:

  • Limited technical analysis tools

68% of retail investor accounts lose money when trading CFDs with this provider.

2. Libertex – Top-Rated ETF Broker Using CFDs

libertexWith Libertex you can speculate on a range of instruments such as stocks, ETFs and indices using CFDs (Contracts for Difference). This product allows you to profit from rising and falling markets using leverage.

The leverage available varies for each asset class but this allows you to control a larger position using a smaller deposit, amplifying both winning and losing trades. 

Libertex trading platform

You only need 100 EUR to open an account with Libertex which can be done in a few minutes. You will then have access to the broker’s feature-rich web trading platform that is easy to use and navigate. 

Pros:

  • CySEC regulated
  • Simple to use platform
  • Low minimum deposit
  • Trade on margin
  • Live news in the web platform

Cons:

  • Only CFDs available

74% of retail investors lose money trading CFDs with this provider.

How to Invest in an India ETF

To start investing in an India ETF follow this four-step guide using 100% commission-free and fully regulated broker eToro. 

1. Create Your Account

Open an eToro account in just a few minutes by filling out some personal details. 

Open an account with eToro and invest with 0% commission

2. Verify Your ID

As eToro is regulated you will need to verify your identity and address. The two verification documents you will need are:

  • A valid passport or driver’s licence
  • A utility bill or bank account statement issued within the last three months

etoro id verification

3. Deposit Funds

To make your investment you need to deposit funds into your account. With eToro, you can deposit fee-free. Deposit methods include:

  • Debit/credit card
  • Bank wire transfer
  • PayPal
  • Neteller
  • Skrill

eToro Deposit

4. Start Investing!

In the search box at the top of the eToro platform, you can type in the instrument you want to trade on. There are thousands to choose from. Click the Trade icon to open a trading ticket. 

eToro trading ticket india etf

From the ticket, you can input your position size and add in a stop loss or take profit price level.  You can also leverage your position by trading a stock CFD in order to control a  larger position with a small deposit.  

eToro – Buy India ETFs 100% Commission Free

The recent boom in emerging markets has investors very excited. The growth potential in some of these markets, such as India could be a boon to investors operating with the right products. 

With eToro, you can access a large range of investment products to capitalise on the growth of India. For example, you can invest in India ETFs 100% commission-free and build your long-term portfolio. 

There are also a ton of other features you will find of value, such as the CopyTrader and CopyPortfolio functions. You can open a free account and see all of these features first-hand. 

etoro logo

68% of retail investors lose money trading CFDs with this provider.

FAQs

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About Natascha Sing PRO INVESTOR

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