The table below shows a list of the Best Index Funds Based on AUM, NAV, and minimum SIP.
| Name | AUM (Cr) | NAV (Rs) | Minimum SIP (Rs) |
| UTI Nifty 50 Index Fund | 19,356.78 | 175.13 | 1,500.00 |
| HDFC Index Fund-NIFTY 50 Plan | 18,127.00 | 243.72 | 100 |
| ICICI Pru Nifty 50 Index Fund | 11,115.37 | 263.48 | 500 |
| SBI Nifty Index Fund | 8,483.97 | 233.05 | 500 |
| UTI Nifty200 Momentum 30 Index Fund | 7,979.66 | 25.13 | 1,500.00 |
| HDFC Index Fund-BSE Sensex | 7,774.90 | 779.88 | 100 |
| ICICI Pru Nifty Next 50 Index Fund | 6,863.18 | 69.74 | 500 |
| UTI Nifty Next 50 Index Fund | 4,662.72 | 27.69 | 500 |
| Navi Nifty 50 Index Fund | 2,448.70 | 16.41 | 10 |
| Motilal Oswal Nifty India Defence Index Fund | 2,330.75 | 8.96 | 1,500.00 |
Introduction To Best Index Funds
UTI Nifty 50 Index Fund
UTI Nifty 50 Index Fund Direct-Growth is a Large Cap Index mutual fund scheme from UTI Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
UTI Nifty 50 Index Fund as an Index fund, manages assets valued at ₹19356.78 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 18.96%. This fund has an exit load of 0.25% and an expense ratio of 0.18%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity – 99.93%, No Debt, and Other – 0.07%.
HDFC Index Fund-NIFTY 50 Plan
HDFC Index Fund Nifty 50 Plan Direct-Growth is a Large Cap Index mutual fund scheme from HDFC Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
HDFC Index Fund-NIFTY 50 Plan as an Index fund, manages assets valued at ₹17127 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 19.04%. This fund has an exit load of 0.25% and an expense ratio of 0.2%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity – 99.84%, No Debt, and Other – 0.16%.
ICICI Pru Nifty 50 Index Fund
ICICI Prudential Nifty 50 Index Direct Plan-Growth is a Large Cap Index mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
ICICI Pru Nifty 50 Index Fund as an Index fund, manages assets valued at ₹11115.37 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 19.04%. This fund has no exit load and an expense ratio of 0.17%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity – 99.9%, No Debt, and Other – 0.1%.
SBI Nifty Index Fund
SBI Nifty Index Fund is an Index mutual fund scheme from SBI Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 02/01/2013.
SBI Nifty Index Fund as an Index fund, manages assets valued at ₹8483.97 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 18.89%. This fund has an exit load of 0.2% and an expense ratio of 0.2%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity – 99.91%, No Debt, and Other – 0.09%.
UTI Nifty200 Momentum 30 Index Fund
UTI Nifty200 Momentum 30 Index Fund Direct-Growth is a Factor mutual fund scheme from UTI Mutual Fund. This fund has been in existence for 3 years and 6 months, having been launched on 18/02/2021.
UTI Nifty200 Momentum 30 Index Fund as an Index fund, manages assets valued at ₹7979.66 crore. Over the past 3 years, it has achieved a Compound Annual Growth Rate (CAGR) of 23.21%. This fund has no exit load and an expense ratio of 0.46%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity – 100.13%, No Debt, and Other – (-)0.13%.
HDFC Index Fund-BSE Sensex
HDFC Index Fund – BSE Sensex Plan Direct-Growth is a Large Cap Index mutual fund scheme from HDFC Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
HDFC Index Fund-BSE Sensex as an Index fund, manages assets valued at ₹7774.90 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 18.28%. This fund has an exit load of 0.25% and an expense ratio of 0.2%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity – 99.9%, No Debt, and Other – 0.1%.
ICICI Pru Nifty Next 50 Index Fund
ICICI Prudential Nifty Next 50 Index Direct-Growth is a Large Cap Index mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
ICICI Pru Nifty Next 50 Index Fund as an Index fund, manages assets valued at ₹6863.18 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 23.61%. This fund has no exit load and an expense ratio of 0.31%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity – 99.9%, No Debt, and Other – 0.1%.
UTI Nifty Next 50 Index Fund
UTI Nifty Next 50 Index Fund Direct-Growth is a Large Cap Index mutual fund scheme from UTI Mutual Fund. This fund has been in existence for 6 years and 3 months, having been launched on 08/06/2018.
UTI Nifty Next 50 Index Fund as an Index fund, manages assets valued at ₹4662.72 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 23.83%. This fund has no exit load and an expense ratio of 0.37%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity – 99.91%, No Debt, and Other – 0.09%.
Navi Nifty 50 Index Fund
Navi Nifty 50 Index Fund Direct-Growth is a Large Cap Index mutual fund scheme from Navi Mutual Fund. This fund has been in existence for 3 years and 2 months, having been launched on 03/07/2021.
Navi Nifty 50 Index Fund as an Index fund, manages assets valued at ₹2448.70 crore. Over the past 3 years, it has achieved a Compound Annual Growth Rate (CAGR) of 14.56%. This fund has no exit load and an expense ratio of 0.06%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity – 99.65%, No Debt, and Other – 0.35%.
Motilal Oswal Nifty India Defence Index Fund
Motilal Oswal Nifty India Defence Index Fund is an Index mutual fund scheme from Motilal Oswal Mutual Fund. This fund has been in existence for 2 months, having been launched on 09/07/2024.
Motilal Oswal Nifty India Defence Index Fund as an Index fund, manages assets valued at ₹2330.75 crore. This fund has an exit load of 1% and an expense ratio of 0.31%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: Equity – 97.92%, Debt – 0.78%, and Other – 1.3%.
What Is Index Funds?
Index funds are investment funds designed to replicate the performance of a specific market index, such as the Nifty 50 or Sensex. They aim to provide broad market exposure by holding the same securities in the same proportions as the index.
These funds are passively managed, meaning they do not attempt to outperform the index but rather mirror its performance. This approach results in lower management fees compared to actively managed funds, as there is minimal buying and selling of securities.
Index funds offer investors a cost-effective way to achieve diversification across a wide range of securities. Their performance closely tracks the index they follow, providing a straightforward, low-cost investment option for long-term growth.
Features Of Best Index Funds In India
The main features of the best index funds in India include low expense ratios, broad market coverage, minimal tracking error, and transparent reporting. These attributes ensure cost-effectiveness, comprehensive diversification, accurate index tracking, and clear performance insights for investors.
- Low Expense Ratios: Top index funds have low expense ratios, minimizing management fees and maximizing investor returns. Lower costs result from passive management strategies, which reduce operational expenses compared to actively managed funds.
- Broad Market Coverage: The best index funds offer exposure to a wide range of securities within major market indices, such as the Nifty 50 or Sensex. This broad market coverage enhances diversification and reduces individual stock risk.
- Minimal Tracking Error: High-quality index funds have minimal tracking error, meaning their performance closely mirrors that of the benchmark index. A low tracking error indicates efficient management and accurate replication of the index’s returns.
- Transparent Reporting: Top index funds provide clear and regular reporting on their holdings, performance, and expenses. Transparent reporting helps investors stay informed about the fund’s operations and ensures accountability, contributing to trust and informed decision-making.
Top Index Funds Based On Expense Ratio
The table below shows the Best-performing Index Funds based on the highest to lowest expense ratio.
| Name | Expense Ratio (%) | Minimum SIP (Rs) |
| UTI Nifty200 Momentum 30 Index Fund | 0.46 | 1,500.00 |
| DSP Nifty 50 Equal Weight Index Fund | 0.4 | 100 |
| UTI Nifty Next 50 Index Fund | 0.37 | 500 |
| Nippon India Nifty Smallcap 250 Index Fund | 0.35 | 100 |
| ICICI Pru Nifty Next 50 Index Fund | 0.31 | 500 |
| Motilal Oswal Nifty India Defence Index Fund | 0.31 | 1,500.00 |
| Motilal Oswal Nifty Midcap 150 Index Fund | 0.3 | 1,500.00 |
| HDFC NIFTY Next 50 Index Fund | 0.3 | 1,500.00 |
| Nippon India Nifty Midcap 150 Index Fund | 0.3 | 1,500.00 |
| Axis Nifty 100 Index Fund | 0.21 | 100 |
Best Index Funds Based On 3Y CAGR
The table below shows the Best Index Funds Based on the Highest 3-year CAGR.
| Name | CAGR 3Y (%) | Minimum SIP (Rs) |
| Motilal Oswal Nifty Midcap 150 Index Fund | 26.67 | 1,500.00 |
| Nippon India Nifty Midcap 150 Index Fund | 26.42 | 1,500.00 |
| Nippon India Nifty Smallcap 250 Index Fund | 26.09 | 100 |
| UTI Nifty200 Momentum 30 Index Fund | 23.21 | 1,500.00 |
| UTI Nifty Next 50 Index Fund | 21.23 | 500 |
| ICICI Pru Nifty Next 50 Index Fund | 21.23 | 500 |
| DSP Nifty 50 Equal Weight Index Fund | 20.01 | 100 |
| Motilal Oswal Nifty 500 Index Fund | 17.93 | 6,000.00 |
| Axis Nifty 100 Index Fund | 15.43 | 100 |
| Bandhan Nifty 50 Index Fund | 14.64 | 100 |
List Of Index Funds Based On Exit Load
The table below shows the Best Performing Index Funds In India Based on Exit Load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.
| Name | AMC | Exit Load (%) |
| UTI Nifty Next 50 Index Fund | UTI Asset Management Company Private Limited | 0 |
| ICICI Pru Nifty Next 50 Index Fund | ICICI Prudential Asset Management Company Limited | 0 |
| HDFC NIFTY Next 50 Index Fund | HDFC Asset Management Company Limited | 0 |
| UTI Nifty200 Momentum 30 Index Fund | UTI Asset Management Company Private Limited | 0 |
| Nippon India Nifty Smallcap 250 Index Fund | Nippon Life India Asset Management Limited | 0 |
| Motilal Oswal Nifty Midcap 150 Index Fund | Motilal Oswal Asset Management Company Limited | 1 |
| Nippon India Nifty Midcap 150 Index Fund | Nippon Life India Asset Management Limited | 0 |
| DSP Nifty 50 Equal Weight Index Fund | DSP Investment Managers Private Limited | 0 |
| Motilal Oswal Nifty 500 Index Fund | Motilal Oswal Asset Management Company Limited | 1 |
| Axis Nifty 100 Index Fund | Axis Asset Management Company Ltd. | 0 |
Index Funds Returns
The table below shows Index Funds Returns Based on 1-year returns/
| Name | Absolute Returns – 1Y (%) | Minimum SIP (Rs) |
| UTI Nifty Next 50 Index Fund | 65.63 | 500 |
| ICICI Pru Nifty Next 50 Index Fund | 65.63 | 500 |
| HDFC NIFTY Next 50 Index Fund | 65.25 | 1,500 |
| UTI Nifty200 Momentum 30 Index Fund | 61.48 | 1,500 |
| Nippon India Nifty Smallcap 250 Index Fund | 52.63 | 100 |
| Motilal Oswal Nifty Midcap 150 Index Fund | 47.86 | 1,500 |
| Nippon India Nifty Midcap 150 Index Fund | 47.56 | 1,500 |
| DSP Nifty 50 Equal Weight Index Fund | 38.37 | 100 |
| Motilal Oswal Nifty 500 Index Fund | 37.06 | 500 |
| Axis Nifty 100 Index Fund | 33.19 | 100 |
Historical Performance Of Index Funds In India
The table below shows the Historical Performance Of Index Funds Funds based on 5-year returns.
| Name | CAGR 5Y (%) | Minimum SIP (Rs) |
| Motilal Oswal Nifty Midcap 150 Index Fund | 31.41 | 1,500.00 |
| UTI Nifty Next 50 Index Fund | 23.83 | 500 |
| DSP Nifty 50 Equal Weight Index Fund | 23.65 | 100 |
| ICICI Pru Nifty Next 50 Index Fund | 23.61 | 500 |
| Motilal Oswal Nifty 500 Index Fund | 22.1 | 500.00 |
| Bandhan Nifty 50 Index Fund | 19.23 | 100 |
| UTI Nifty 50 Index Fund | 19.05 | 1,500.00 |
| ICICI Pru Nifty 50 Index Fund | 19.04 | 500 |
| Nippon India Index Fund-Nifty 50 Plan | 18.98 | 100 |
| HDFC Index Fund-NIFTY 50 Plan | 18.96 | 100 |
Factors To Consider When Investing In Index Funds In India
The main factors to consider when investing in index funds in India include the choice of index, expense ratio, fund performance, and tracking error. These aspects ensure that the fund aligns with your investment goals and offers efficient market exposure.
- Choice of Index: Select an index fund that tracks a market index aligning with your investment goals, such as the Nifty 50 or Sensex. Different indices represent various sectors or market segments, affecting diversification and risk.
- Expense Ratio: Evaluate the fund’s expense ratio, which represents the annual fees as a percentage of assets. Lower expense ratios are preferable as they reduce costs and improve net returns, making the fund more cost-effective over time.
- Fund Performance: Review the historical performance of the index fund relative to its benchmark index. Consistent performance in tracking the index accurately reflects the fund’s efficiency and reliability in replicating market returns.
- Tracking Error: Consider the fund’s tracking error, which measures how closely the fund’s performance aligns with the index it tracks. A lower tracking error indicates better performance in mirroring the index, ensuring effective investment alignment.
How To Invest In Index Funds?
To invest in index funds, start by researching different funds that track indices matching your investment goals, such as the Nifty 50 or Sensex. Compare their performance, fees, and fund managers to find a suitable option.
Next, open an investment account with a mutual fund company or brokerage platform. You can choose between a lump-sum investment or setting up a systematic investment plan (SIP) for regular contributions, depending on your financial strategy and preferences.
Once your account is set up, purchase shares of the chosen index fund. Monitor the fund periodically to ensure it continues to align with your investment objectives and make adjustments if needed based on your financial goals.
Impact Of Market Trends On Best Index Funds
Market trends directly influence the performance of index funds, as these funds mirror the movements of their respective indices. A bullish market generally leads to higher returns, while a bearish market can result in lower performance, reflecting the overall index’s trajectory.
In rising markets, index funds benefit from the general increase in stock values, leading to potential capital gains. Conversely, during downturns, the value of the index funds may decline, mirroring the drop in the index’s performance due to widespread market weaknesses.
Long-term market trends affect index funds by shaping their growth trajectory. While short-term fluctuations can cause volatility, index funds typically smooth out over time, reflecting the overall market’s growth or decline, providing investors with a broad market exposure.
How Does Index Funds Perform In Volatile Markets?
In volatile markets, index funds experience performance fluctuations that reflect the broader market’s ups and downs. As they track a specific index, their value rises and falls with the index, mirroring market volatility.
While index funds are not immune to market volatility, their broad diversification helps mitigate extreme impacts. By holding a wide range of securities, they reduce the risk associated with individual stock movements, providing a more stable performance relative to more concentrated investments.
Over the long term, index funds tend to recover from market volatility. They benefit from the overall market’s upward trend, smoothing out short-term fluctuations and delivering steady growth that aligns with the index’s long-term performance.
Advantages Of Index Funds
The main advantages of index funds include low management fees, broad diversification, passive investment strategy, and simplicity in investing. These benefits help investors achieve market returns efficiently and cost-effectively, making index funds a popular choice for long-term investment.
- Low Management Fees: Index funds typically have lower management fees compared to actively managed funds. This cost efficiency results from passive management, which involves fewer transactions and lower administrative expenses, maximizing the investor’s net returns.
- Broad Diversification: By tracking a market index, index funds provide exposure to a wide range of securities across various sectors. This broad diversification helps reduce individual stock risk and smoothens portfolio performance, enhancing stability and mitigating potential losses.
- Passive Investment Strategy: Index funds follow a passive investment strategy, aiming to match, not outperform, the market index. This approach avoids the risks associated with active stock picking and market timing, offering steady, predictable returns aligned with overall market performance.
- Simplicity in Investing: Index funds are straightforward and easy to understand, making them accessible for both novice and experienced investors. Their simplicity eliminates the need for extensive research or frequent trading, allowing investors to build a diversified portfolio with minimal effort.
Contribution Of Best Index Funds To Portfolio Diversification
The best index funds enhance portfolio diversification by tracking a broad market index, such as the Nifty 50 or Sensex. This approach spreads investments across numerous sectors and companies, reducing individual stock risk and stabilizing overall portfolio performance.
By including top index funds, investors gain exposure to a wide array of assets within a single fund. This diversification helps mitigate the impact of market volatility and specific stock fluctuations, contributing to more balanced and consistent long-term portfolio growth.
Who Should Invest In Top Index Funds In India?
Top index funds in India are ideal for long-term investors seeking low-cost, diversified exposure to the market. They suit those who prefer a passive investment approach, aiming for steady growth without actively managing or frequently trading their investments.
These funds are also well-suited for beginners and those with a disciplined investment strategy. With their broad market coverage and minimal fees, they offer a straightforward way to build wealth over time while reducing individual stock risk and market timing concerns.
Impact Of Manager Expertise On Index Funds Performance
In index funds, manager expertise has a minimal direct impact on performance since these funds aim to replicate the performance of a specific index rather than outperform it. The primary role of the manager is to ensure accurate tracking of the index.
However, manager expertise can influence operational efficiency, including minimizing tracking errors and managing fund costs. Skilled managers ensure the fund closely mirrors the index, optimizing performance by maintaining low expenses and precise tracking, which is crucial for achieving the fund’s objectives.
FAQs – Best Index Funds In India
Index funds are mutual funds or ETFs designed to replicate the performance of a specific market index, such as the Nifty 50 or Sensex. They offer broad market exposure, low costs, and passive management by tracking the chosen index.
Top Index Funds #1: UTI Nifty 50 Index Fund
Top Index Funds #2: HDFC Index Fund-NIFTY 50 Plan
Top Index Funds #3: ICICI Pru Nifty 50 Index Fund
Top Index Funds #4: SBI Nifty Index Fund
Top Index Funds #5: UTI Nifty200 Momentum 30 Index Fund
These funds are listed based on the Highest AUM.
The Best Index Funds based on expense ratio include UTI Nifty200 Momentum 30 Index Fund, DSP Nifty 50 Equal Weight Index Fund, UTI Nifty Next 50 Index Fund, Nippon India Nifty Smallcap 250 Index Fund, and ICICI Pru Nifty Next 50 Index Fund.
In India, index fund taxation includes capital gains tax: long-term capital gains (LTCG) over ₹1 lakh are taxed at 10%, while short-term capital gains (STCG) are taxed at 15%. Dividends are taxed based on the investor’s income tax slab.
In India, index funds include broad-market funds tracking major indices like Nifty 50 or Sensex, sector-specific funds targeting specific industries, and thematic funds focusing on investment themes. They aim to replicate the performance of their respective indices.
To invest in index funds, research funds that track your desired index, open an account with Alice Blue, and invest through lump-sum purchases or systematic investment plans (SIPs). Regularly review to ensure alignment with your goals.
An index fund is a mutual fund that passively tracks a specific market index, while an ETF (Exchange-Traded Fund) also tracks an index but trades on stock exchanges like shares. ETFs offer real-time pricing, lower expense ratios, and greater liquidity, whereas index funds are bought at NAV.
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Disclaimer: Please note that mutual fund performances are subject to market risks, and it’s always essential to review the latest scheme-related documents and consult with a financial advisor before making any investment decisions.
