Best ETFs to Invest in India for the Long Term

Long-term investing is all about robust asset allocation, diversification, and consistent participation in fundamentally strong themes. ETFs (Exchange Traded Funds) have emerged as the preferred tool for Indian investors seeking passive wealth generation with low costs and broad diversification.

Whether you’re a beginner or an experienced market participant, the right ETF mix can power your journey to financial freedom over a 10-year or longer horizon.

Table of Contents

Why ETFs for Long-Term Investment?

Cost-efficient: Lower expense ratios compared to active funds preserve a larger portion of your returns.
Transparency: ETF portfolios closely mimic the index or sector they track, allowing easy performance monitoring.
Liquidity: Indian ETFs are traded on NSE/BSE with high turnover, ensuring easy buying and selling.
Diversification: With one investment, gain exposure to 50–250+ stocks, reducing risk linked to individual companies.

Let’s deep dive into the five best ETFs across different themes—each justifying its place in a high-growth, resilient portfolio.

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1. Nifty 50 ETF: SBI Nifty 50 ETF

This ETF mirrors the Nifty 50 index, which includes India’s top 50 companies from various key sectors like finance, IT, energy, and FMCG.

Why this ETF?

Provides direct exposure to Indian economic growth through blue-chip companies.
Boasts high liquidity, low tracking error, and one of the largest AUMs among Indian ETFs.
Historically, the Nifty 50 has delivered ~12–14% CAGR over the past 10-20 years, making it ideal for compounding wealth.

Ideal for: Passive long-term investors, those seeking broad-based market exposure and stability.

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2. Small Cap ETF: HDFC Nifty Smallcap 250 ETF

This ETF tracks the Nifty Smallcap 250 index, composed of 250 high-potential small-cap stocks with strong growth trajectories.

Why this ETF?

Small caps outperform in long-term bull cycles and leverage India’s entrepreneurial growth.
Offers higher expected returns with calculated risk, ideal for early-stage wealth creators.
Expense ratio of 0.20% (among the lowest).
Strong liquidity and robust AUM indicate investor confidence.

Ideal for: Investors comfortable with volatility, seeking high growth and willing to ride out market cycles.

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3. Mid Cap ETF: Motilal Oswal Nifty Midcap 150 ETF

Tracks the Nifty Midcap 150 index, making it the most diversified mid-cap ETF in the Indian market.

Why this ETF?

Mid-caps combine stability with more aggressive growth compared to large caps. They provide a sweet spot between risk and reward.
A basket of 150 mid-size companies reduces stock-specific risks.
Strong long-term growth; Indian mid-caps have historically delivered higher CAGR than large caps during economic upcycles.

Ideal for: Investors targeting a balance between blue-chip safety and higher growth potential.

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4. IT Sector ETF: Nippon India ETF Nifty IT

Exclusively tracks the Nifty IT Index, comprising top IT companies like Infosys, TCS, HCL Tech, Wipro, and Tech Mahindra.

Why this ETF?

IT is India’s marquee export sector, with global client footprints and a strong track record.
Provides thematic exposure to the technological boom and digital transformation.
Long-term growth prospects are supported by expanding global demand and India’s leadership in IT services.
Low correlation with other Indian sectors, aiding diversification.

Ideal for: Investors bullish on the tech sector, seeking alpha with lower volatility than small/midcaps.

5. International ETF: Motilal Oswal NASDAQ 100 ETF

Tracks the NASDAQ 100 index, which represents the 100 largest non-financial companies listed on the NASDAQ stock exchange—featuring global giants like Apple, Microsoft, Google, and Amazon.

Why this ETF?

Enables international diversification, vital for risk management and currency hedging.
Participate in long-term American technology and innovation megatrends.
Historical returns have been among the strongest globally, providing valuable compounding for Indian investors.

Ideal for: Investors wanting to hedge against Indian market cycles and benefit from global tech growth.

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How to Build a Portfolio Using These ETFs

By blending these five ETFs, investors can achieve an all-weather portfolio spanning Indian blue-chips, high-growth domestic themes, technological innovation, and global megatrends. Here’s an example allocation (adjust as per your risk profile):

ETF Name	Allocation (%)
SBI Nifty 50 ETF	30
HDFC Nifty Smallcap 250 ETF	20
Motilal Oswal Nifty Midcap 150 ETF	20
Nippon India ETF Nifty IT	10
Motilal Oswal NASDAQ 100 ETF	20

This structure ensures:

Core stability via large caps.
High growth engines through small and mid caps.
Global and tech growth via IT and NASDAQ 100.

Tips for Choosing and Holding ETFs for 10+ Years

Don’t chase past returns—focus on low expense ratios and consistent tracking of the index.
Rebalance annually to maintain desired allocations.
Prefer ETFs with higher average trading volumes for easy buying/selling.
Remain invested through market cycles to maximize the compounding effect.

Best ETFs to Invest in India for the Long Term

Conclusion

India offers a growing, dynamic ETF ecosystem that serves every long-term investor. Allocating to SBI Nifty 50 ETF, Motilal Oswal Nifty Midcap 150 ETF, HDFC Nifty Smallcap 250 ETF, Nippon India ETF Nifty IT, and Motilal Oswal NASDAQ 100 ETF gives you diversified, cost-effective, and high-potential exposure.

These funds combine the best of Indian growth stories with global opportunities and sectoral powerhouses, ensuring your portfolio remains resilient, future-ready, and primed for wealth creation over the next decade and beyond.