Passives Here are the ETFs with lowest tracking error and tracking difference
28 large cap ETFs have tracking error of 0.05%. On the other hand, a few large cap ETFs marginally outperformed their benchmark.
Kushan Shah Apr 3, 2024
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An analysis done by Cafemutual shows that 28 large cap ETFs have tracking error less than 0.05%.
Tracking error is the standard deviation of the difference of daily scheme return and daily benchmark return over a period of time.
DSP NIFTY 50 Equal Weight ETF, HDFC NIFTY 100 ETF, HDFC Nifty 50 ETF, ICICI Prudential Nifty 50 ETF, ICICI Prudential S&P BSE Sensex ETF, ICICI Prudential Nifty 100 ETF, Mirae Asset Nifty 50 ETF, Nippon India ETF Nifty 50 BeES, Quantum Nifty 50 ETF, SBI S&P BSE Sensex ETF, SBI Nifty 50 ETF, Tata Nifty 50 ETF, UTI S&P BSE Sensex ETF, UTI Nifty 50 ETF and UTI Nifty Next 50 ETF have the lowest tracking error of 0.04% in large cap category.
In the mid cap space, HDFC NIFTY Midcap 150 ETF has the lowest tracking error of 0.04%. ICICI Prudential Nifty Midcap 150 ETF and Mirae Asset Nifty Midcap 150 ETF were the next with tracking error of 0.05% and 0.06% respectively.
Among the multicap ETFs, ICICI Prudential S&P BSE 500 ETF has the lowest tracking error of 0.03%.
In sectoral/thematic funds, there were 25 funds with tracking error less than or equal to 0.04%. Out of them, ICICI Prudential Nifty Bank ETF, ICICI Prudential Nifty Healthcare ETF, ICICI Prudential Nifty Infrastructure ETF, ICICI Prudential Nifty Private Bank ETF, Nippon India Nifty Pharma ETF, SBI Nifty Bank ETF, UTI Nifty Bank ETF were the top funds with a tracking error of 0.02%.
Among factor funds, there were 8 funds with low tracking error. DSP Nifty Midcap 150 Quality 50 ETF, HDFC NIFTY100 Low Volatility 30 ETF, ICICI Prudential Nifty 100 Low Volatility 30 ETF, Kotak Nifty 50 Value 20 ETF and SBI Nifty 200 Quality 30 ETF have the lowest tracking error of 0.05%.
In gold ETFs, UTI Gold ETF had the lowest tracking error of 0.06%. Quantum Gold Fund was the second best with 0.11%.
Let us look at the table to know more.
Large Cap | |
Scheme Name | Tracking Error direct (%) |
HDFC NIFTY 100 ETF | 0.04 |
ICICI Prudential Nifty 100 ETF | 0.04 |
DSP NIFTY 50 Equal Weight ETF | 0.04 |
UTI Nifty Next 50 ETF | 0.04 |
Tata Nifty 50 ETF | 0.04 |
SBI S&P BSE Sensex ETF | 0.04 |
SBI Nifty 50 ETF | 0.04 |
UTI S&P BSE Sensex ETF | 0.04 |
HDFC Nifty 50 ETF | 0.04 |
Mirae Asset Nifty 50 ETF | 0.04 |
Quantum Nifty 50 ETF | 0.04 |
UTI Nifty 50 ETF | 0.04 |
Nippon India ETF Nifty 50 BeES | 0.04 |
ICICI Prudential Nifty 50 ETF | 0.04 |
ICICI Prudential S&P BSE Sensex ETF | 0.04 |
Nippon India ETF Nifty 100 | 0.05 |
HDFC NIFTY NEXT 50 ETF | 0.05 |
ICICI Prudential Nifty Next 50 ETF | 0.05 |
Nippon India ETF Nifty Next 50 Junior BeES | 0.05 |
UTI S&P BSE Sensex Next 50 ETF | 0.05 |
SBI Nifty Next 50 ETF | 0.05 |
SBI S&P BSE 100 ETF | 0.05 |
Motilal Oswal Nifty 50 ETF | 0.05 |
Aditya Birla Sun Life Nifty 50 ETF | 0.05 |
HDFC S&P BSE Sensex ETF | 0.05 |
Bandhan Nifty 50 ETF | 0.05 |
Nippon India ETF S&P BSE Sensex | 0.05 |
Mid Cap | |
Scheme Name | Tracking Error direct (%) |
HDFC NIFTY Midcap 150 ETF | 0.04 |
ICICI Prudential Nifty Midcap 150 ETF | 0.05 |
Mirae Asset Nifty Midcap 150 ETF | 0.06 |
Small Cap | |
Scheme Name | Tracking Error direct (%) |
HDFC NIFTY Smallcap 250 ETF | 0.11 |
Target Maturity | |
Scheme Name | Tracking Error direct (%) |
SBI Nifty 10 yr Benchmark G-Sec ETF | 0.03 |
Nippon India ETF Nifty 5 yr Benchmark G-Sec | 0.05 |
Nippon India ETF Nifty 8-13 yr G-Sec Long Term Gilt | 0.10 |
Debt | |
Scheme Name | Tracking Error direct (%) |
SBI Nifty 10 yr Benchmark G-Sec ETF | 0.03 |
Nippon India ETF Nifty 5 yr Benchmark G-Sec | 0.05 |
Nippon India ETF Nifty 8-13 yr G-Sec Long Term Gilt | 0.10 |
Sectoral & Thematic | |
Scheme Name | Tracking Error direct (%) |
ICICI Prudential Nifty Bank ETF | 0.02 |
ICICI Prudential Nifty Healthcare ETF | 0.02 |
ICICI Prudential Nifty Infrastructure ETF | 0.02 |
ICICI Prudential Nifty Private Bank ETF | 0.02 |
Nippon India Nifty Pharma ETF | 0.02 |
SBI Nifty Bank ETF | 0.02 |
UTI Nifty Bank ETF | 0.02 |
HDFC NIFTY Bank ETF | 0.03 |
HDFC NIFTY Private Bank ETF | 0.03 |
ICICI Prudential Nifty Auto ETF | 0.03 |
ICICI Prudential Nifty India Consumption ETF | 0.03 |
ICICI Prudential Nifty IT ETF | 0.03 |
Kotak Nifty Bank ETF | 0.03 |
Motilal Oswal S&P BSE Healthcare ETF | 0.03 |
Nippon India ETF Nifty Bank BeES | 0.03 |
Nippon India Nifty Auto ETF | 0.03 |
SBI Nifty Consumption ETF | 0.03 |
SBI Nifty Private Bank ETF | 0.03 |
Axis NIFTY Bank ETF | 0.04 |
DSP Nifty Bank ETF | 0.04 |
ICICI Prudential Nifty FMCG ETF | 0.04 |
Kotak Nifty MNC ETF | 0.04 |
Mirae Asset Nifty India Manufacturing ETF | 0.04 |
Nippon India ETF Nifty IT | 0.04 |
SBI Nifty IT ETF | 0.04 |
Factor | |
Scheme Name | Tracking Error direct (%) |
DSP Nifty Midcap 150 Quality 50 ETF | 0.05 |
HDFC NIFTY100 Low Volatility 30 ETF | 0.05 |
ICICI Prudential Nifty 100 Low Volatility 30 ETF | 0.05 |
Kotak Nifty 50 Value 20 ETF | 0.05 |
SBI Nifty 200 Quality 30 ETF | 0.05 |
HDFC NIFTY100 Quality 30 ETF | 0.06 |
HDFC NIFTY50 Value 20 ETF | 0.07 |
ICICI Prudential Nifty50 Value 20 ETF | 0.07 |
Multicap | |
Scheme Name | Tracking Error direct (%) |
ICICI Prudential S&P BSE 500 ETF | 0.03 |
HDFC S&P BSE 500 ETF | 0.05 |
Liquid | |||
Scheme Name | Tracking Error direct (%) | ||
Aditya Birla Sun Life CRISIL Liquid Overnight ETF | 0.01 | ||
Kotak Nifty 1D Rate Liquid ETF | 0.03 | ||
Nippon India ETF Nifty 1D Rate Liquid BeES | 0.03 | ||
DSP NIFTY 1D Rate Liquid ETF | 0.05 | ||
Gold | |||
Scheme Name | Tracking Error direct (%) | ||
UTI Gold ETF | 0.06 | ||
Quantum Gold Fund | 0.11 | ||
LIC MF Gold ETF | 0.12 | ||
Nippon India ETF Gold BeES | 0.12 | ||
Silver | |
Scheme Name | Tracking Error direct (%) |
ICICI Prudential Silver ETF | 0.50 |
DSP Silver ETF | 0.52 |
Nippon India Silver ETF | 0.52 |
Aditya Birla Sun Life Silver ETF | 0.53 |
International | |
Scheme Name | Tracking Error direct (%) |
Motilal Oswal NASDAQ 100 ETF | 0.04 |
Mirae Asset NYSE FANG+ ETF | 0.06 |
Mirae Asset Hang Seng TECH ETF | 0.15 |
Tracking Difference
Tracking difference is simply the difference between returns generated by the fund and its benchmark. Lower the tracking difference, better the fund. It’s also calculated in percentage terms.
Note that we have taken tracking difference data of February 2024.
Our analysis shows that some of the large cap ETFs have actually outperformed their benchmarks marginally. Nippon India ETF S&P BSE Sensex has the best tracking difference of 0.04%. ICICI Prudential S&P BSE Sensex ETF was next with a tracking difference of 0.02%. Bandhan Nifty 50 ETF finished the top 3 with the tracking error of 0.01%.
Among mid caps, Motilal Oswal Nifty Midcap 100 ETF has the lowest tracking difference of -0.19%.
HDFC NIFTY Smallcap 250 ETF was the only small cap fund which had a tracking difference of -0.54%.
When it comes to sectoral/thematic funds, Aditya Birla Sun Life Nifty Healthcare ETF had the best tracking difference of 0.62%, Mirae Asset Nifty Financial Services ETF was the second best at -0.04% while DSP Nifty Bank ETF was the third at -0.12%.
In factor funds, Kotak Nifty 50 Value 20 ETF was the best performing fund with a tracking difference of -0.29%. DSP Nifty Midcap 150 Quality 50 ETF and HDFC NIFTY100 Quality 30 ETF also had low tracking differences of -0.33% and -0.36% respectively.
In multicap funds, HDFC S&P BSE 500 ETF had the lowest tracking difference of -0.42%. ICICI Prudential S&P BSE 500 ETF also had a low tracking difference of -0.44%.
In the target maturity fund category, BHARAT Bond ETF - April 2032 had the best tracking difference of 0.49%. BHARAT Bond ETF - April 2031 was the second best at 0.44% while BHARAT Bond ETF - April 2033 was the third best at 0.39%.
When it comes to debt funds, Nippon India ETF Nifty 5 yr Benchmark G-Sec was the best performing fund with the tracking difference of -0.12%. SBI Nifty 10 yr Benchmark G-Sec ETF came second with a tracking difference of -0.15% while Nippon India ETF Nifty 8-13 yr G-Sec Long Term Gilt was the third best with a tracking difference of -0.18%.
In liquid funds, ICICI Prudential S&P BSE Liquid Rate ETF was the best with a tracking difference of -0.29%. DSP NIFTY 1D Rate Liquid ETF and Kotak Nifty 1D Rate Liquid ETF were the other two top performers with the tracking difference of -0.32% and -0.33% respectively.
Among gold ETFs, Quantum Gold Fund was the best performing fund with a tracking difference of -0.15%. LIC MF Gold ETF and Mirae Asset Gold ETF finished the top 3 with the tracking difference of -0.33% and -0.60% respectively.
Let us look at the tabular data to know more.
Large Cap | |
Scheme Name | Tracking Difference (1 year) - Direct (%) |
Nippon India ETF S&P BSE Sensex | 0.04 |
ICICI Prudential S&P BSE Sensex ETF | 0.02 |
Bandhan Nifty 50 ETF | 0.01 |
Mid Cap | |
Scheme Name | Tracking Difference (1 year) - Direct (%) |
Motilal Oswal Nifty Midcap 100 ETF | -0.19 |
Mirae Asset Nifty Midcap 150 ETF | -0.27 |
Nippon India ETF Nifty Midcap 150 | -0.38 |
Small Cap | |
Scheme Name | Tracking Difference (1 year) - Direct (%) |
HDFC NIFTY Smallcap 250 ETF | -0.54 |
Sectoral Thematic | |
Scheme Name | Tracking Difference (1 year) - Direct (%) |
Aditya Birla Sun Life Nifty Healthcare ETF | 0.62 |
Mirae Asset Nifty Financial Services ETF | -0.04 |
DSP Nifty Bank ETF | -0.12 |
Factor | |
Scheme Name | Tracking Difference (1 year) - Direct (%) |
Kotak Nifty 50 Value 20 ETF | -0.29 |
DSP Nifty Midcap 150 Quality 50 ETF | -0.33 |
HDFC NIFTY100 Quality 30 ETF | -0.36 |
Multicap | |
Scheme Name | Tracking Difference (1 year) - Direct (%) |
HDFC S&P BSE 500 ETF | -0.42 |
ICICI Prudential S&P BSE 500 ETF | -0.44 |
Debt | |
Scheme Name | Tracking Difference (1 year) - Direct (%) |
Nippon India ETF Nifty 5 yr Benchmark G-Sec | -0.12 |
SBI Nifty 10 yr Benchmark G-Sec ETF | -0.15 |
Nippon India ETF Nifty 8-13 yr G-Sec Long Term Gilt | -0.18 |
Target Maturity | |
Scheme Name | Tracking Difference (1 year) - Direct (%) |
BHARAT Bond ETF - April 2032 | 0.49 |
BHARAT Bond ETF - April 2031 | 0.44 |
BHARAT Bond ETF - April 2033 | 0.39 |
Liquid | |
Scheme Name | Tracking Difference (1 year) - Direct (%) |
ICICI Prudential S&P BSE Liquid Rate ETF | -0.29 |
DSP NIFTY 1D Rate Liquid ETF | -0.32 |
Kotak Nifty 1D Rate Liquid ETF | -0.33 |
Gold | |
Scheme Name | Tracking Difference (1 year) - Direct (%) |
Quantum Gold Fund | -0.15 |
LIC MF Gold ETF | -0.33 |
Mirae Asset Gold ETF | -0.60 |
Silver | |
Scheme Name | Tracking Difference (1 year) - Direct (%) |
Aditya Birla Sun Life Silver ETF | -0.60 |
Axis Silver ETF | -0.68 |
ICICI Prudential Silver ETF | -0.69 |
International | |
Scheme Name | Tracking Difference (1 year) - Direct (%) |
Nippon India ETF Hang Seng BeES | -0.57 |
Mirae Asset Hang Seng TECH ETF | -0.58 |
Motilal Oswal Nasdaq Q50 ETF | -1.15 |
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