Introduction

If you have ever followed the news on a night when the stock market was booming  you’ve likely heard the anchor say   The Sensex rose by 500 points today or  Nifty hit an all-time high.  These two names are the pulse of India's economy. But as an investor, you don't have to just watch them, you can actually own them through something called an ETF (Exchange Traded Fund). An ETF is like a readymade fruit basket.  Instead of buying one apple (one stock) and hoping it's sweet  you buy a basket that contains all the best fruits in the market. If you buy a Nifty 50 ETF, you own a tiny piece of India's top 50 companies. If you buy a Sensex ETF  you own the top 30.

In 2026, as more Indians move their money away from just sitting around in low-interest bank accounts, the big question is: Which basket is better for your hard-earned money? Should you go with the broader 50 or the concentrated 30?

Open Demat account -  Start investing with a quick setup

Quick Comparison: Nifty 50 vs. Sensex

What exactly are these ETFs?

Think of the Indian stock market as a school.

• The Sensex is like the  Top 30  brightest students in the whole school. They are the oldest, most established  and very reliable.
• The Nifty 50 is like the  Top 50.  It includes those same 30 students plus 20 more who are also excellent and very large.

When you invest in an ETF  you are putting your money into a fund that copies these lists exactly. If Reliance Industries makes up 10% of the Nifty 50  your ETF will use 10% of your money to buy Reliance shares. Because no expert is trying to outsmart the market, the fees (expense ratios) for these funds are incredibly low, often less than ₹5 for every ₹10 000 you invest!

Nifty 50 ETFs: The  Broad Foundation

In 2026  the Nifty 50 remains the most popular choice for Indian investors. It is the  backbone  of the equity market.

Why it might be better for you:

• More Sectors: Because it has 50 companies  it covers more areas of the economy. If the Banking sector has a bad month but the IT sector does great  the Nifty 50 is more likely to stay stable.
• Highly Liquid: Liquidity  means it is very easy to buy and sell. Nifty ETFs are the most traded in India  meaning you can get your cash back almost instantly at the right market price.
• Lower Impact of One Failure: If one company in the list has a bad year  it only makes up about 2% of the total basket. This prevents your whole investment from a sudden collapse.

Sensex ETFs: The  Elite 30

The Sensex is India's oldest index (started in 1986). It is the  Grandfather of the Indian market.

Why it might be better for you:

• The Best of the Best: The Sensex only picks the absolute giants. These are companies that have survived for decades  like HDFC Bank and Hindustan Unilever.
• Simplicity: It focuses on the 30 companies that drive almost half of India’s total stock market value.
• Strong Performance: Historically  because it is so concentrated on the biggest winners  the Sensex has sometimes given slightly higher returns than the Nifty 50 during  Bull Markets  (when everything is going up).

The Hidden Costs: Expense Ratio & Tracking Error

In 2026  all ETFs look similar  but the  leaks  are in the details. When choosing between a Nifty or Sensex ETF  look at these two numbers:

1. Expense Ratio: This is the annual fee. In 2026  top ETFs like SBI Nifty 50 ETF or ICICI Prudential Sensex ETF charge as little as 0.02% to 0.05%. Always pick the one with the lowest number.
2. Tracking Error: This tells you how well the ETF is actually  copying  the index. If the Nifty goes up 10% but your ETF only goes up 9.8%  that 0.2% difference is the tracking error. The lower this number  the better the fund manager is at their job.

Which One Should You Choose in 2026?

Because the 30 companies in the Sensex are also part of the 50 companies in the Nifty  their movements are nearly identical. If the Sensex goes up  the Nifty usually follows.

Choose Nifty 50 ETF if:

• You want the maximum possible diversification.
• You want to follow the  Standard benchmark used by most professional investors.
• You plan to use the money as the  Core  of your long-term wealth.

Choose Sensex ETF if:

• You prefer a more  concentrated  bet on only the biggest legacy companies.
• You are using a specific app or bank that offers a Sensex ETF with a lower fee than their Nifty option.

Top ETFs to Consider in 2026

Based on size (AUM) and low costs  here are the leaders for February 2026:

Best Nifty 50 ETFs:

1. SBI Nifty 50 ETF: The largest in India  used by huge institutions. Very safe and liquid.
2. Nippon India ETF Nifty 50 BeES (NIFTYBEES): The oldest and most traded by regular people. Great for small investors.
3. ICICI Prudential Nifty 50 ETF: Known for having one of the lowest tracking errors in the industry.

Best Sensex ETFs:

1. HDFC S&P BSE Sensex ETF: Offers a very stable way to track the top 30.
2. UTI S&P BSE Sensex ETF: A low-cost favorite with a long track record of accuracy.
3. ICICI Prudential S&P BSE Sensex ETF: Highly efficient and easy to buy on any platform.

How to start your Investment

You don't need a lot of money. In 2026  you can buy 1 unit of these ETFs for as little as ₹200 to ₹300.

1. Demat Account: Open a Demat Account with Motilal Oswal.
2. Search: Type  NIFTYBEES or ICICISENSX  in the search bar.
3. Buy: Click buy just like you would buy a regular stock.
4. SIP: Most brokers now allow you to set an  ETF SIP where ₹500 or ₹1 000 is automatically invested every month.

Related articles: Difference between Sensex and Nifty | Stocks vs ETFs: A guide to selecting the right investment | What is Sensex and Nifty? Understanding India’s key stock market indices

Frequently Asked Questions (FAQs)