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A research done by Cafemutual on ETFs shows that at least 50 ETFs across categories have a tracking error at least 0.05%.
Tracking error is the annualized difference between standard deviation of the fund and its benchmark. Lower the tracking difference, better the fund. It’s calculated in percentage.
Large caps have 10 ETFs with lowest tracking error of 0.02%. This includes ICICI Prudential Nifty 50 ETF, Nippon India ETF Nifty 50 BeES, Mirae Asset Nifty 50 ETF, SBI Nifty 50 ETF, UTI Nifty 50 ETF, SBI S&P BSE Sensex ETF, UTI S&P BSE Sensex ETF, Axis Nifty 50 ETF, ICICI Prudential S&P BSE Sensex ETF, ICICI Prudential S&P BSE Sensex ETF and Kotak Nifty 50 ETF.
In mid cap category, ICICI Prudential Nifty Midcap 150 ETF has the lowest tracking error, followed by Mirae Asset Nifty Midcap 150 ETF and ICICI Prudential S&P BSE Midcap Select ETF.
Similarly, among debt ETF category, SBI Nifty 10 yr Benchmark G-Sec ETF has the lowest tracking error of 0.11%.
While ICICI Prudential Nifty 100 Low Volatility 30 ETF has the lowest tracking error in factor fund category, Nippon India ETF Nifty 1D Rate Liquid BeES is the lowest in liquid ETF category.
In gold ETF category, UTI Gold ETF has the lowest tracking error of 0.07%.
Let us look at the table to know top three ETFs with low tracking error across categories:
Large cap
|
|
Scheme Name |
Tracking Error - Direct (%) |
|
1 |
ICICI Prudential Nifty 50 ETF |
0.02 |
|
Nippon India ETF Nifty 50 BeES |
0.02 |
|
|
Mirae Asset Nifty 50 ETF |
0.02 |
|
|
SBI Nifty 50 ETF |
0.02 |
|
|
UTI Nifty 50 ETF |
0.02 |
|
|
SBI S&P BSE Sensex ETF |
0.02 |
|
|
UTI S&P BSE Sensex ETF |
0.02 |
|
|
Axis Nifty 50 ETF |
0.02 |
|
|
ICICI Prudential S&P BSE Sensex ETF |
0.02 |
|
|
Kotak Nifty 50 ETF |
0.02 |
|
|
2 |
HDFC Nifty 50 ETF |
0.03 |
|
HDFC S&P BSE Sensex ETF |
0.03 |
|
|
Quantum Nifty 50 ETF |
0.03 |
|
|
Nippon India ETF S&P BSE Sensex |
0.03 |
|
|
Motilal Oswal Nifty 50 ETF |
0.03 |
|
|
Aditya Birla Sun Life S&P BSE Sensex ETF |
0.03 |
|
|
Invesco India Nifty 50 ETF |
0.03 |
|
|
SBI S&P BSE 100 ETF |
0.03 |
|
|
ICICI Prudential Nifty 100 ETF |
0.03 |
|
|
Nippon India ETF Nifty 100 |
0.03 |
|
|
3 |
Aditya Birla Sun Life Nifty 50 ETF |
0.04 |
|
Kotak S&P BSE Sensex ETF |
0.04 |
|
|
DSP NIFTY 50 Equal Weight ETF |
0.04 |
Midcap
|
|
Scheme Name |
|
Tracking Error - Direct (%) |
|
1 |
ICICI Prudential Nifty Midcap 150 ETF |
Midcap |
0.05 |
|
2 |
Mirae Asset Nifty Midcap 150 ETF |
Midcap |
0.06 |
|
3 |
ICICI Prudential S&P BSE Midcap Select ETF |
Midcap |
0.07 |
Debt
|
|
Scheme Name |
Tracking Error - Direct (%) |
|
1 |
SBI Nifty 10 yr Benchmark G-Sec ETF |
0.11 |
|
2 |
ICICI Prudential Nifty 5 yr Benchmark G-SEC ETF |
0.17 |
|
3 |
Nippon India ETF Nifty 5 yr Benchmark G-Sec |
0.22 |
Factor fund
|
|
Scheme Name |
Tracking Error - Direct (%) |
|
1 |
ICICI Prudential Nifty 100 Low Volatility 30 ETF |
0.03 |
|
2 |
SBI Nifty 200 Quality 30 ETF |
0.04 |
|
3 |
ICICI Prudential Nifty50 Value 20 ETF |
0.05 |
|
Kotak Nifty 50 Value 20 ETF |
0.05 |
Sectoral/Thematic
|
|
Scheme Name |
Tracking Error - Direct (%) |
|
1 |
ICICI Prudential Nifty Bank ETF |
0.02 |
|
Nippon India Nifty Pharma ETF |
0.02 |
|
|
ICICI Prudential Nifty Private Bank ETF |
0.02 |
|
|
Mirae Asset Nifty Financial Services ETF |
0.02 |
|
|
2 |
Nippon India ETF Nifty Bank BeES |
0.03 |
|
SBI Nifty Bank ETF |
0.03 |
|
|
ICICI Prudential Nifty India Consumption ETF |
0.03 |
|
|
SBI Nifty Consumption ETF |
0.03 |
|
|
Aditya Birla Sun Life Nifty Healthcare ETF |
0.03 |
|
|
3 |
UTI Nifty Bank ETF |
0.04 |
|
ICICI Prudential Nifty Auto ETF |
0.04 |
|
|
ICICI Prudential Nifty Healthcare ETF |
0.04 |
|
|
Mirae Asset Nifty India Manufacturing ETF |
0.04 |
Gold
|
|
Scheme Name |
Tracking Error - Direct (%) |
|
1 |
UTI Gold ETF |
0.07 |
|
2 |
Nippon India ETF Gold BeES |
0.16 |
|
3 |
Quantum Gold Fund |
0.19 |
Silver
|
|
Scheme Name |
Tracking Error - Direct (%) |
|
1 |
ICICI Prudential Silver ETF |
0.70 |
|
2 |
Nippon India Silver ETF |
0.71 |
|
3 |
Aditya Birla Sun Life Silver ETF |
0.79 |
Liquid
|
|
Scheme Name |
Tracking Error - Direct (%) |
|
1 |
Nippon India ETF Nifty 1D Rate Liquid BeES |
0.03 |
|
2 |
DSP NIFTY 1D Rate Liquid ETF |
0.05 |
|
3 |
ICICI Prudential S&P BSE Liquid Rate ETF |
0.34 |
Target maturity
|
|
Scheme Name |
Tracking Error - Direct (%) |
|
1 |
Nippon India ETF Nifty CPSE Bond Plus SDL Sep 2024 50:50 |
0.48 |
|
2 |
BHARAT Bond ETF - April 2025 |
0.57 |
|
3 |
Axis Nifty AAA Bond Plus SDL Apr 2026 50:50 ETF |
0.65 |
International
|
|
Scheme Name |
|
Tracking Error - Direct (%) |
|
1 |
Mirae Asset NYSE FANG+ ETF |
International |
0.06 |
|
2 |
Nippon India ETF Nifty 50 Shariah BeES |
International |
0.08 |
|
3 |
Mirae Asset S&P 500 Top 50 ETF |
International |
0.12 |
Tracking difference
The report further suggests that Bandhan S&P BSE Sensex ETF has the lowest tracking difference in large cap ETF space and across categories. SBI Nifty 50 ETF and Bandhan Nifty 50 ETF were the next two in the list in large cap ETF category.
Tracking difference is simply the difference between returns generated by the fund and its benchmark. Lower the tracking difference, better the fund. It’s calculated in percentage.
In midcap ETFs, Mirae Asset Nifty Midcap 150 ETF has the lowest tracking difference of -0.17 followed by Nippon India ETF Nifty Midcap 150 with tracking difference of -0.23 and ICICI Prudential Nifty Midcap 150 ETF with tracking difference of -0.25.
Among factor ETFs, Kotak Nifty 100 Low Volatility 30 ETF has the lowest tracking difference.
Further, Motilal Oswal Nasdaq Q50 ETF has the lowest tracking difference in international ETF category.
Let us look at the table to know more.
Large cap
|
Scheme Name |
Tracking Difference (1 year) - Direct (%) |
|
Bandhan S&P BSE Sensex ETF |
0.00 |
|
SBI Nifty Next 50 ETF |
0.21 |
|
Bandhan Nifty 50 ETF |
0.41 |
Midcap
|
Scheme Name |
Tracking Difference (1 year) - Direct (%) |
|
Mirae Asset Nifty Midcap 150 ETF |
-0.17 |
|
Nippon India ETF Nifty Midcap 150 |
-0.23 |
|
ICICI Prudential Nifty Midcap 150 ETF |
-0.25 |
Factor fund
|
Scheme Name |
Tracking Difference (1 year) - Direct (%) |
|
Kotak Nifty 100 Low Volatility 30 ETF |
-0.14 |
|
Kotak Nifty 50 Value 20 ETF |
-0.23 |
|
DSP Nifty Midcap 150 Quality 50 ETF |
-0.25 |
Sectoral/ Thematic
|
Scheme Name |
Tracking Difference (1 year) - Direct (%) |
|
SBI Nifty IT ETF |
0.31 |
|
UTI Nifty Bank ETF |
-0.03 |
|
Kotak Nifty IT ETF |
-0.04 |
Target maturity
|
Scheme Name |
Tracking Difference (1 year) - Direct (%) |
|
BHARAT Bond ETF - April 2030 |
0.20 |
|
BHARAT Bond ETF - April 2025 |
0.11 |
|
BHARAT Bond ETF - April 2032 |
-0.04 |
Silver
|
Scheme Name |
Tracking Difference (1 year) - Direct (%) |
|
ICICI Prudential Silver ETF |
-0.93 |
|
Nippon India Silver ETF |
-1.02 |
|
Aditya Birla Sun Life Silver ETF |
-1.06 |
Liquid
|
Scheme Name |
Tracking Difference (1 year) - Direct (%) |
|
ICICI Prudential S&P BSE Liquid Rate ETF |
-0.29 |
|
DSP NIFTY 1D Rate Liquid ETF |
-0.56 |
|
Nippon India ETF Nifty 1D Rate Liquid BeES |
-0.87 |
International
|
Scheme Name |
Tracking Difference (1 year) - Direct (%) |
|
Motilal Oswal Nasdaq Q50 ETF |
-0.26 |
|
Nippon India ETF Hang Seng BeES |
-0.45 |
|
Mirae Asset Hang Seng TECH ETF |
-0.59 |
