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An analysis done by Cafemutual shows that many large cap ETFs have the tracking error of 0.06%. interestingly, 11 large cap ETFs have tracking error of 0.04%.
Tracking error is the annualized difference between standard deviation of the fund and its benchmark. Tracking error measures the extent to which returns of an ETF have deviated from its underlying index.
The lowest tracking error in the mid cap ETF category is 0.05% where as for sectoral ETFs it goes down to 0.02%.
Let us look at the table to know which are the top ETFs in terms of tracking error:
|
Large Cap |
|
|
Rank |
Schemes |
|
1 |
DSP NIFTY 50 Equal Weight ETF |
|
ICICI Prudential Nifty 100 ETF |
|
|
ICICI Prudential Nifty 50 ETF |
|
|
ICICI Prudential S&P BSE Sensex ETF |
|
|
Mirae Asset Nifty 50 ETF |
|
|
Nippon India ETF Nifty 50 BeES |
|
|
Quantum Nifty 50 ETF |
|
|
SBI Nifty 50 ETF |
|
|
SBI S&P BSE Sensex ETF |
|
|
UTI S&P BSE Sensex ETF |
|
|
UTI S&P BSE Sensex Next 50 ETF |
|
|
2 |
Aditya Birla Sun Life Nifty 50 ETF |
|
HDFC NIFTY 100 ETF |
|
|
HDFC Nifty 50 ETF |
|
|
HDFC S&P BSE Sensex ETF |
|
|
ICICI Prudential Nifty50 Value 20 ETF |
|
|
Motilal Oswal Nifty 50 ETF |
|
|
Nippon India ETF Nifty 100 |
|
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Nippon India ETF Nifty Next 50 Junior BeES |
|
|
Nippon India ETF S&P BSE Sensex |
|
|
SBI Nifty Next 50 ETF |
|
|
SBI S&P BSE 100 ETF |
|
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SBI S&P BSE Sensex Next 50 ETF |
|
|
Tata Nifty 50 ETF |
|
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UTI Nifty Next 50 ETF |
|
|
3 |
Aditya Birla Sun Life S&P BSE Sensex ETF |
|
Axis Nifty 50 ETF |
|
|
Bandhan Nifty 50 ETF |
|
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ICICI Prudential Nifty Next 50 ETF |
|
|
Invesco India Nifty 50 ETF |
|
|
Mirae Asset Nifty Next 50 ETF |
|
|
UTI Gold ETF |
|
Midcap |
||
|
Rank |
Schemes |
Tracking Error Direct (%) |
|
1 |
ICICI Prudential Nifty Midcap 150 ETF |
0.05 |
|
2 |
Mirae Asset Nifty Midcap 150 ETF |
0.06 |
|
3 |
ICICI Prudential S&P BSE Midcap Select ETF |
0.07 |
|
Gold |
||
|
Rank |
Schemes |
Tracking Error Direct (%) |
|
1 |
LIC MF Gold ETF |
0.13 |
|
2 |
Nippon India ETF Gold BeES |
0.14 |
|
3 |
Quantum Gold Fund |
0.17 |
|
SBI Gold ETF |
|
Silver |
||
|
Rank |
Schemes |
Tracking Error Direct (%) |
|
1 |
Nippon India Silver ETF |
0.59 |
|
2 |
ICICI Prudential Silver ETF |
0.61 |
|
3 |
Axis Silver ETF |
0.64 |
|
Debt |
||
|
Rank |
Schemes |
Tracking Error Direct (%) |
|
1 |
Nippon India ETF Nifty 5 yr Benchmark G-Sec |
0.07 |
|
SBI Nifty 10 yr Benchmark G-Sec ETF |
||
|
2 |
Motilal Oswal Nifty 5 year Benchmark G-Sec ETF |
0.09 |
|
International |
||
|
Rank |
Schemes |
Tracking Error Direct (%) |
|
1 |
Mirae Asset NYSE FANG+ ETF |
0.06 |
|
2 |
Nippon India ETF Nifty 50 Shariah BeES |
0.08 |
|
3 |
Mirae Asset S&P 500 Top 50 ETF |
0.11 |
|
Factor |
||
|
Rank |
Schemes |
Tracking Error Direct (%) |
|
1 |
SBI Nifty 200 Quality 30 ETF |
0.03 |
|
2 |
Aditya Birla Sun Life Nifty 200 Quality 30 ETF |
0.04 |
|
ICICI Prudential Nifty 100 Low Volatility 30 ETF |
||
|
UTI Nifty 50 ETF |
||
|
3 |
DSP Nifty Midcap 150 Quality 50 ETF |
0.05 |
|
Kotak Nifty 50 Value 20 ETF |
|
Sectoral Thematic |
||
|
Rank |
Schemes |
Tracking Error Direct (%) |
|
1 |
ICICI Prudential Nifty Healthcare ETF |
0.02 |
|
ICICI Prudential Nifty Private Bank ETF |
||
|
Nippon India Nifty Pharma ETF |
||
|
2 |
Aditya Birla Sun Life Nifty Healthcare ETF |
0.03 |
|
HDFC NIFTY Bank ETF |
||
|
ICICI Prudential Nifty Auto ETF |
||
|
ICICI Prudential Nifty Bank ETF |
||
|
ICICI Prudential Nifty India Consumption ETF |
||
|
ICICI Prudential Nifty Infrastructure ETF |
||
|
Motilal Oswal S&P BSE Healthcare ETF |
||
|
Nippon India ETF Nifty Bank BeES |
||
|
SBI Nifty Bank ETF |
||
|
SBI Nifty Consumption ETF |
||
|
UTI Nifty Bank ETF |
||
|
3 |
Axis NIFTY Bank ETF |
0.04 |
|
ICICI Prudential Nifty FMCG ETF |
||
|
Kotak Nifty MNC ETF |
||
|
Mirae Asset Nifty India Manufacturing ETF |
||
|
Nippon India Nifty Auto ETF |
||
|
SBI Nifty Private Bank ETF |
|
Liquid |
||
|
Rank |
Schemes |
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 |
0.36 |
|
Target Maturity |
||
|
Rank |
Schemes |
Tracking Error Direct (%) |
|
1 |
ICICI Prudential Nifty 5 yr Benchmark G-SEC ETF |
0.13 |
|
2 |
Nippon India ETF Nifty CPSE Bond Plus SDL Sep 2024 50:50 |
0.36 |
|
3 |
BHARAT Bond ETF - April 2025 |
0.44 |
Tracking difference
Interestingly, two large cap ETFs - HDFC Nifty 50 ETF and Nippon India ETF S&P BSE Sensex have outperformed their respective benchmarks by tracking difference of 0.01% and 0.04%.
In the midcap category, Motilal Oswal Nifty Midcap 100 ETF, Mirae Asset Nifty Midcap 150 ETF and ICICI Prudential S&P BSE Midcap Select ETF have the lowest tracking difference of -0.17%, -0.23 and -0.28, respectively.
Let us look at the table to know which are the top ETFs in terms of tracking difference:
|
Large Cap |
||
|
Rank |
Schemes |
Tracking Difference (1 year) - Direct (%) |
|
1 |
HDFC Nifty 50 ETF |
0.04 |
|
2 |
Nippon India ETF S&P BSE Sensex |
0.01 |
|
3 |
ICICI Prudential S&P BSE Sensex ETF |
-0.01 |
|
Midcap |
||
|
Rank |
Schemes |
Tracking Difference (1 year) - Direct (%) |
|
1 |
Motilal Oswal Nifty Midcap 100 ETF |
-0.17 |
|
2 |
Mirae Asset Nifty Midcap 150 ETF |
-0.23 |
|
3 |
ICICI Prudential S&P BSE Midcap Select ETF |
-0.28 |
|
Gold |
||
|
Rank |
Schemes |
Tracking Difference (1 year) - Direct (%) |
|
1 |
LIC MF Gold ETF |
-0.32 |
|
2 |
Invesco India Gold ETF |
-0.85 |
|
3 |
Axis Gold ETF |
-0.88 |
|
Silver |
||
|
Rank |
Schemes |
Tracking Difference (1 year) - Direct (%) |
|
1 |
Axis Silver ETF |
-1.23 |
|
2 |
ICICI Prudential Silver ETF |
-1.38 |
|
3 |
HDFC Silver ETF |
-1.40 |
|
Debt |
||
|
Rank |
Schemes |
Tracking Difference (1 year) - Direct (%) |
|
1 |
Nippon India ETF Nifty 5 yr Benchmark G-Sec |
-0.09 |
|
2 |
Nippon India ETF Nifty 8-13 yr G-Sec Long Term Gilt |
-0.19 |
|
SBI Nifty 10 yr Benchmark G-Sec ETF |
||
|
3 |
Motilal Oswal Nifty 5 year Benchmark G-Sec ETF |
-0.25 |
|
International |
||
|
Rank |
Schemes |
Tracking Difference (1 year) - Direct (%) |
|
1 |
Motilal Oswal Nasdaq Q50 ETF |
-0.65 |
|
2 |
Mirae Asset Hang Seng TECH ETF |
-0.85 |
|
Nippon India ETF Hang Seng BeES |
||
|
3 |
Nippon India ETF Nifty 50 Shariah BeES |
-1.15 |
|
Factor |
||
|
Rank |
Schemes |
Tracking Difference (1 year) - Direct (%) |
|
1 |
HDFC NIFTY100 Quality 30 ETF |
0.30 |
|
2 |
UTI Nifty 50 ETF |
-0.05 |
|
3 |
DSP Nifty Midcap 150 Quality 50 ETF |
-0.23 |
|
Sectoral Thematic |
||
|
Rank |
Schemes |
Tracking Difference (1 year) - Direct (%) |
|
1 |
Mirae Asset Nifty Financial Services ETF |
-0.04 |
|
UTI Nifty Bank ETF |
||
|
2 |
Aditya Birla Sun Life Nifty Bank ETF |
-0.14 |
|
Aditya Birla Sun Life Nifty Healthcare ETF |
||
|
|
SBI Nifty Private Bank ETF |
|
|
3 |
ICICI Prudential Nifty Bank ETF |
-0.16 |
|
Liquid |
||
|
Rank |
Schemes |
Tracking Difference (1 year) - Direct (%) |
|
1 |
DSP NIFTY 1D Rate Liquid ETF |
-0.47 |
|
2 |
ICICI Prudential S&P BSE Liquid Rate ETF |
-0.37 |
|
3 |
Nippon India ETF Nifty 1D Rate Liquid BeES |
-0.90 |
|
Target Maturity |
||
|
Rank |
Schemes |
Tracking Difference (1 year) - Direct (%) |
|
1 |
BHARAT Bond ETF - April 2025 |
-0.14 |
|
2 |
Axis Nifty AAA Bond Plus SDL Apr 2026 50:50 ETF |
-0.15 |
|
3 |
BHARAT Bond ETF - April 2032 |
-0.17 |
