Exchange-traded funds have become an increasingly important part of India's investment market. Investors can now use ETFs to gain exposure to large-cap equities, mid-caps, government-owned companies, banking, healthcare, technology, international markets, gold and silver.

However, asking which ETF has delivered the "highest return" requires an important clarification.

The answer depends on the period being measured.

An ETF leading during 2026 year-to-date may not be the strongest performer over one year, three years or five years.  Commodity ETFs can also produce very different returns from equity ETFs.

For investors, understanding these differences is more useful than simply selecting the ETF appearing at the top of a performance table.

Which ETFs have performed strongly in 2026?

Based on the ETF comparison used by LiveWorldMarket with performance data through July 27, 2026, several international, pharmaceutical and healthcare-focused ETFs stood out on a year-to-date basis.

The Motilal Oswal Nasdaq 100 ETF showed a YTD return of approximately 19.87%, while the Nippon India Nifty Pharma ETF was around 14.62%.

The Mirae Asset NYSE FANG+ ETF showed approximately 14.10% YTD, while healthcare ETFs from ICICI Prudential and Axis were around 12–13%.

These figures demonstrate how leadership can shift away from broad-market indices toward specific sectors or international markets.

Returns are historical and can change significantly as markets move.

International technology ETFs

International-market ETFs have attracted attention because they allow Indian investors to gain exposure to companies and markets outside India through exchange-listed products.

The Motilal Oswal Nasdaq 100 ETF is one example.

According to the July 27 comparison used by LiveWorldMarket, it had generated approximately 19.87% YTD and about 35.52% over the preceding one-year period.

The Mirae Asset NYSE FANG+ ETF also showed strong performance.

However, international ETFs involve risks beyond ordinary equity-market fluctuations.

Investors may face exposure to currency movements, high overseas valuations, concentration in a limited number of technology companies and regulatory limits affecting overseas investment by Indian mutual funds.

Strong historical performance therefore does not automatically make an international ETF suitable for every portfolio.

Pharma and healthcare ETFs

Healthcare-related ETFs were another relatively strong area during 2026.

The Nippon India Nifty Pharma ETF showed approximately 14.62% YTD performance in the July comparison, while healthcare ETFs from ICICI Prudential and Axis were also in positive territory.

Healthcare can sometimes behave differently from highly cyclical sectors.

Demand for medicines, hospitals and healthcare services does not disappear simply because economic growth slows.

Nevertheless, pharmaceutical companies face their own risks, including regulatory decisions, drug approvals, pricing pressure, currency movements and changes in export demand.

Sector ETFs therefore remain concentrated investments.

What about PSU ETFs?

Government-owned companies delivered exceptional returns during parts of the previous market cycle, which helped ETFs such as CPSE ETF and Bharat 22 produce strong multi-year results.

For example, LiveWorldMarket's July 2026 comparison showed CPSE ETF with approximately 29.96% annualised five-year performance, even though its 2026 YTD return was much more modest.

This is an excellent illustration of why the "best ETF" depends heavily on the measurement period.

An ETF that dominated over five years does not necessarily lead during the current year.

Silver ETFs tell a different story

Silver provides an even clearer example of why return periods should never be mixed.

As of August 12, ICICI Prudential Silver ETF had generated around 107.1% over the preceding one year, according to ACE MF data reported by Moneycontrol. Similar large one-year returns were recorded by several other silver ETFs.

However, the same data showed negative performance over shorter three- and six-month periods.

Therefore, saying a silver ETF produced more than 100% return does not mean it gained 100% during calendar year 2026.

It represents a trailing 12-month period.

This distinction is essential whenever ETF performance is compared.

Why broad-market ETFs may show lower returns

Nifty 50 ETFs generally track the same underlying Nifty 50 index.

As a result, the returns among established Nifty 50 ETFs tend to remain relatively close, with small differences caused by expense ratios, tracking difference and portfolio-management efficiency.

Broad-market ETFs may sometimes look unattractive compared with a sector that has recently rallied sharply.

But that comparison ignores concentration risk.

A Nifty 50 ETF provides exposure across multiple industries, while a pharma, IT, PSU or thematic ETF may depend heavily on one part of the economy.

Higher historical return usually needs to be considered alongside the risk taken to achieve it.

What should investors compare besides returns?

Selecting an ETF only because it delivered the highest recent return can result in performance chasing.

Investors may also consider:

Underlying index: Understand exactly what securities or assets the ETF tracks.

Expense ratio: Higher costs reduce investor returns over time.

Tracking difference: An ETF's return can differ from its benchmark.

Liquidity: Higher trading activity can generally make buying and selling easier.

Bid-ask spread: A wide spread can increase the effective transaction cost.

Assets under management: Fund size can provide useful context, although bigger is not automatically better.

Concentration: Sector and thematic ETFs can expose investors to significantly greater volatility.

NSE notes that ETFs listed in India span equity, debt, gold and international index categories, illustrating how different the underlying risk profiles can be.

Should investors buy the best-performing ETF?

Past performance can be useful for understanding how an ETF behaved during a particular market environment, but it cannot tell investors what will happen next.

A sector that has already generated exceptional returns may continue rising, remain flat or experience a correction.

Instead of asking only:

“Which ETF gave the highest return?”

a more useful question may be:

“What exposure does this ETF provide, what risks am I taking, and does it fit my overall investment objective?”

That shifts the focus from chasing historical returns toward portfolio construction.

Final takeaway

There is no permanent "highest-return ETF."

The leader changes according to the starting date, ending date, asset category and market environment.

During 2026, international technology, pharma and healthcare ETFs have been among the relatively stronger equity-oriented categories in certain measurement periods, while commodity ETFs such as silver show very different results when trailing one-year numbers are considered.

Investors should therefore clearly distinguish between YTD returns, trailing one-year returns and annualised long-term returns.

Performance tables can be useful research tools, but they should be the beginning of an ETF comparison rather than the final investment decision.

Disclaimer: This article is for educational and informational purposes only. ETF prices and returns can rise or fall, and past performance does not guarantee future returns. The information should not be considered investment advice, a recommendation or a solicitation to buy or sell any security. Investors should consider their objectives, risk tolerance and individual circumstances before investing.