Top 10 Smart Beta ETFs in India 2025: Smart Investing Guide

You must have heard about ETFs in the financial market, but have you heard the Smart approach of these ETFs? Here comes the ETF that is smart in nature, you being a smart investor shall know about these Smart Beta ETFs. 

An ETF is like a basket containing many different stocks that you can buy or sell as a single unit on a stock exchange. This provides a simple, low-cost way to diversify your investments. 

In this blog we will learn about what a Smart Beta ETF is and also look at the Best Smart Beta ETFs that you as an investor can use for your future investment.

What is a Smart Beta ETF?

A Smart Beta ETF is a type of Exchange Traded Fund (ETF) that offers a middle path between traditional index investing and active fund management.

Unlike a standard index fund (like a Nifty 50 fund) which invests in companies based on their market size, a Smart Beta ETF uses a rules-based strategy to select stocks based on specific characteristics or “factors.” The goal is to achieve better returns or reduce risk compared to a market-size-weighted index.

In Smart Beta ETF Funds some common strategies are used like value of these ETFs, recent momentum seen in the ETFs, quality of the ETFs by focusing on the company’s financial health and even things like low volatility of these ETFs. 

Top 10 Smart Beta ETFs in India 

This ETF provides investors with an exposure to fundamentally strong companies beyond just the top 100 large caps. Though this ETF might have lower trading volumes (liquidity) compared to its larger peers, which could slightly increase trading costs.

Investors that are looking for a mix of both large cap and mid cap companies can opt for this ETF. 

ETF Name/Fund	Factor	Price (₹)	Market Cap / AUM (₹ Cr.)	Expense Ratio (%)
UTI Nifty 200 Momentum 30	Momentum	21.29	8204	0.45
ICICI Pru Nifty 100 Low Vol 30 ETF	Low Volatility	22.39	3,757	0.41
ICICI Pru Nifty Alpha Low-Vol 30 ETF	Alpha & Low Volatility	27.18	1770	0.41
Nippon India Nifty 50 Value 20	Value	149.99	168	0.26
DSP Nifty 50 Equal Weight ETF	Equal Weight	336	595	0.20
Kotak Nifty Alpha 50 ETF	Alpha / Momentum	48.86	689	0.30
HDFC NIFTY 100 Equal Weight	Equal Weight	16.87	396	0.40
Mirae Asset Nifty 200 Alpha 30 ETF	Alpha / Momentum	25.20	425	0.47
Edelweiss Nifty 100 Quality 30	Quality	14.72	155	0.32
SBI ETF Quality	Quality	225.53	80	0.30

Here is a list of the top 10 smart beta ETFs and index funds in India.

1. UTI Nifty 200 Momentum 30 Index Fund

In this fund Momentum strategy is used as it tracks the Nifty 200 Momentum 30 Index and picks 30 stocks from the top 200 companies which tracks the strongest performance for the last 6 to 12 months.    

This smart beta ETF has potential to give very high returns during the strong market uptrend, as the fastest moving stocks are included in this.  Though this could be termed as a high risk strategy as the market trend can change as the high momentum stocks can even fall quickly as they can rise.   

This smart beta ETF is best suitable for Aggressive investors who can take high risk as this strategy is cyclical to understand. 

You can add this high octane strategy to your portfolio through Pocketful. Simply search for the UTI Momentum 30 Index Fund and start investing with just a few taps.

2. ICICI Prudential Nifty 100 Low Volatility 30 ETF

In this ETF a low volatility strategy is used as it tracks Nifty 100 Low Volatility 30 Index. In this ETF 30 stocks from the top 100 companies are selected that have witnessed least price fluctuation over the past year, you can expect a less fluctuation in this ETF.

This smart beta ETF provides stability to your financial portfolio which may fall less than the others during the market corrections. But during the bullish market scenario this fund might give you a lower return than the main index.   

Conservative investors, retirees, or anyone who wants to avoid high market swings or minimize their overall portfolio risk can opt for this smart beta ETF. 

You can Invest in this smart beta ETF using the Pocketful platform as it gives you a friendly interface to make your financial investments. 

3. ICICI Prudential Nifty Alpha Low-Volatility 30 ETF

This ETF is a multi strategy ETF that combines two different strategies combining ‘Alpha’ (high momentum) and ‘Low Volatility’ at one place. This smart beta ETF tracks the well performing companies that are relatively stable. You can expect good returns with minimal risk attached to it.   

This smart beta ETF offers diversification to the investors compared to single factor ETF as low volatility can reduce the risk of the aggressive alpha strategy. Though this fund cannot fully protect like a low volatility fund.

It is best suitable for moderate risk taking investors who like to do factor investing but do not want to bet on just one factor. 

With Rs.0 brokerage on delivery, you can build a diversified factor portfolio efficiently by investing in ICICI Pru Alpha Low-Vol 30 ETF that is available on Pocketful.

4. Nippon India Nifty 50 Value 20 Index Fund

A ‘Value’ investing strategy is used in this smart beta ETF as it tracks the Nifty 50 Value 20 Index, which selects 20 companies from the Nifty 50 that appear to be undervalued based on metrics like low P/E ratio, low P/B ratio, and high dividend yield.   

In this a “buy low, sell high” strategy is used as there is a high potential for great returns when these undervalued stocks are discovered by the market and their prices rise.

But these stocks can stay at low prices for a long time (also known as ‘value trap’) as the market gets affected by the expensive, high growth stocks.   

Investors that are looking for long term Patient investors with a long term horizon who believe in the value investing philosophy shall invest in this smart beta ETF.

5. DSP Nifty 50 Equal Weight ETF

Here a strategy known as ‘Equity Weight’ strategy is used where instead of giving more weight to the bigger companies it divides the investment and only invests 2% of the whole amount equally in all 50 companies of the Nifty 50 index.  

It reduces the risk of having too much money in just a few top companies. It gives more exposure to smaller companies in the Nifty 50, which could have higher growth potential. But you should be aware that it can underperform the regular Nifty 50 when a few giant companies are driving the entire market rally and this frequent rebalancing can lead to slightly higher costs.   

It is best suitable for investors who want to invest in the top 50 companies but are worried about the heavy concentration in the standard Nifty 50 index.

The DSP Equal Weight ETF on Pocketful offers a truly diversified way to invest in the Nifty 50.

6. Kotak Nifty Alpha 50 ETF

This smart beta ETF follows the Nifty Alpha 50 Index that is a pure ‘Alpha’ or high momentum strategy. Here 50 stocks from the top 300 companies are selected according to their previous years performance. 

This smart beta ETF selects the top performing stocks of the market offering very high returns during strong market trends. But this can be very risky as well as the stocks that rise rapidly can even fall very fast.

If you are an aggressive investor who has complete understanding of the market cycle and is aware about the sharp falls then this smart beta ETF is suitable for you. 

For those with a high risk appetite seeking high returns, the Kotak Alpha 50 ETF can be found on the Pocketful app. Remember to research thoroughly before investing in such aggressive strategies.

7. HDFC NIFTY 100 Equal Weight Index Fund

This smart beta ETF tracks the Nifty 100 Equal weight index and gives equal 1% weight to each of the 100, this is also an Equal Weight fund but is more diverse than DSP one.   

The best part is that it has diversification across 100 large cap stocks, which greatly reduces concentration risk but remember, it may lag when a few mega cap stocks are driving the market.

If you want your portfolio to represent the broad Indian large cap market without just some of these being dominated, you can opt for this ETF. 

8. Mirae Asset Nifty 200 Alpha 30 ETF

A high momentum or ‘Alpha’ strategy is used in this ETF, where it tracks the top 30 stocks from the top 200 companies using Nifty 200 Alpha 30 Index.   

This ETF captures the fast growing mid cap stocks as the focus is on 30 high momentum stocks. Though it comes with all the risks of a momentum strategy, including high volatility and the risk of sharp reversals. It is also a relatively new ETF with a limited track record.   

This is best suitable for aggressive investors who are comfortable with high risk and want to bet on current market trends continuing. 

You can invest in this smart beta etf using the Pocketful platform where you can even compare it with other momentum ETFs to make a balanced strategy. 

9. Edelweiss Nifty 100 Quality 30 Index Fund

In this ETF Nifty 100 Quality 30 Index is tracked where 30 companies from the Nifty 100 based on their quality score like high return on equity, low debt, and stable earnings growth are selected. This fund follows the ‘Quality’ strategy as it relies on qualities of the tracked companies. 

This fund provides steady long term growth as you invest in fundamentally strong, well managed companies which can be resilient during bad economic times. But the quality of the stocks can sometimes be expensive, as it might give lower returns during market rallies led by riskier, lower quality stocks.

This fund is ideal for long term investors who prefer to own stable, profitable businesses.

10. SBI ETF Quality

Quality factor is followed in this ETF, where it tracks the Nifty 200 Quality 30 Index. It is similar to the Edelweiss fund but selects stocks from a broader list of the top 200 companies, which means it can include some high quality mid cap stocks.   

Read Also: Best ETFs in India to Invest

Risks & Limitations of Smart Beta ETFs

Before you invest, it is very important to understand the risks because “Smart” does not mean “risk free.”

• Market Cycle Dependency: Performance of these ETFs may differ according to the market cycles, as different sectors have their good and bad years and different factors also have their own cycles. Some of these can perform poorly for a few years and then suddenly become the top performer.   
• Limited liquidity in India: Although ETFs trade like stocks but not all of them are traded with the same intensity, some of the small beta ETFs might have few buyers or sellers which can lead to a wider “bid ask spread” (the difference between the buying and selling price), this can act as a small hidden cost every time you trade.   
• Factor concentration risk: When you invest in a single factor ETF, you are concentrating your money in one particular style of investing. If that style goes out of favour with the market, your portfolio could underperform the broader market for a long time.   

Read Also: Small-Cap ETFs to Invest in India

Conclusion

Smart beta ETFs offer an exciting and intelligent way to invest and also are a great middle path between simple, passive index funds and expensive, actively managed funds.

However, they are not a magic wand for higher returns. The right smart beta ETF for you depends completely on your own financial goals, how long you want to invest for, and how much risk you are comfortable taking. Investors that are looking for conservative investments can opt for a low volatile ETF or Quality ETF and for aggressive investors a Momentum or Alpha ETF can be best suited.  

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