+91-22-48913909Best Index Mutual Funds in India for 2026
Index Mutual Funds are no longer a niche investment option in India — they have become one of the fastest-growing segments of the mutual fund industry.
As of 2025, passive funds including Index Funds and ETFs account for over 17% of India’s total mutual fund AUM, compared to less than 4% a decade ago (AMFI data). This sharp rise reflects a simple shift in investor behaviour — more Indians now prefer low-cost, rules-based Investing over expensive active strategies.
Instead of trying to outperform the market, index funds aim to replicate well-known indices such as the Nifty 50 and Sensex, offering diversification, transparency, and long-term compounding at minimal cost.
Over the last 10 years, the Nifty 50 TRI has delivered approximately 13–14% CAGR, proving that passive investing can be an effective wealth-building strategy when followed with discipline.
However, not all index funds are identical.
Funds tracking the same index can deliver noticeably different outcomes due to expense ratio, tracking efficiency, fund size, and tracking error — making proper selection essential for long-term investors.
What is an Index Fund?
An index mutual fund is a type of mutual fund that simply follows the market instead of trying to beat it.
Simple example - Imagine India’s stock market is a cricket team.
The Nifty 50 index is like the best 50 players selected from the country — players such as Reliance, TCS, Infosys, HDFC Bank, ITC, and others.
Now:
- An index mutual fund doesn’t try to choose which player will score the most runs.
- It simply buys all 50 players in the same proportion as the team selection.
So if:
- Reliance has 10% weight in Nifty 50
- TCS has 8%
- Infosys has 6%
The index fund invests in exactly the same ratio.
What happens next?
- If the Nifty 50 rises by 1%,
- the index fund also rises by almost 1% (after small expenses).
If the market falls, the fund falls too.
There is no fund manager guessing stocks, no frequent buying or selling — just automatic tracking of the index.
In simple words - Index fund = “Invest in the entire market at once.”
You don’t need to predict which stock will perform best — you grow your money along with India’s economy.
Talk to our investment specialist
Why Index Funds Are Becoming Popular in India
Low Cost (Expense Ratio) – Since there’s no active management, index funds charge as low as 0.1% – 0.3%, compared to 1% – 2% for active funds.
Market Outperformance by Passive Investing – Many active funds are struggling to beat their benchmarks consistently. Data from SPIVA reports shows over 85% of Large cap funds underperform their benchmarks over 10 years.
Transparency – You always know what you’re investing in.
Ideal for Long-Term Wealth Creation – Perfect for SIP investing and Retirement planning.
Fund Selection Methodology used to find 9 funds
Top 9 Best Performing Index Funds FY 26 - 27
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2024 (%) LIC MF Index Fund Sensex Growth ₹146.426
↑ 0.94 ₹85 -6.2 -6.7 0 9.6 10.1 9.1 Nippon India Index Fund - Sensex Plan Growth ₹39.9458
↑ 0.26 ₹849 -6.1 -6.5 0.5 10.1 10.6 9.8 IDBI Nifty Index Fund Growth ₹36.2111
↓ -0.02 ₹208 9.1 11.9 16.2 20.3 11.7 Franklin India Index Fund Nifty Plan Growth ₹196.488
↑ 1.26 ₹678 -5.3 -5.3 2.7 11.8 11.2 11.3 ICICI Prudential Nifty Next 50 Index Fund Growth ₹61.7598
↑ 0.86 ₹7,604 2.2 1.4 9.6 22 15.2 2.1 IDBI Nifty Junior Index Fund Growth ₹52.1037
↑ 0.72 ₹90 2.2 1.3 9.5 21.7 15.1 2 LIC MF Index Fund Nifty Growth ₹134.152
↑ 0.86 ₹335 -5.4 -5.6 2.1 11.2 10.8 10.7 Nippon India Index Fund - Nifty Plan Growth ₹41.351
↑ 0.27 ₹3,030 -5.3 -5.3 2.8 11.9 11.2 11.4 Bandhan Nifty Fund Growth ₹52.4039
↑ 0.34 ₹2,228 -5.3 -5.4 2.6 11.7 11.3 11.2 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 17 Apr 26 Research Highlights & Commentary of 9 Funds showcased
Commentary LIC MF Index Fund Sensex Nippon India Index Fund - Sensex Plan IDBI Nifty Index Fund Franklin India Index Fund Nifty Plan ICICI Prudential Nifty Next 50 Index Fund IDBI Nifty Junior Index Fund LIC MF Index Fund Nifty Nippon India Index Fund - Nifty Plan Bandhan Nifty Fund Point 1 Bottom quartile AUM (₹85 Cr). Upper mid AUM (₹849 Cr). Bottom quartile AUM (₹208 Cr). Lower mid AUM (₹678 Cr). Highest AUM (₹7,604 Cr). Bottom quartile AUM (₹90 Cr). Lower mid AUM (₹335 Cr). Top quartile AUM (₹3,030 Cr). Upper mid AUM (₹2,228 Cr). Point 2 Established history (23+ yrs). Established history (15+ yrs). Established history (15+ yrs). Oldest track record among peers (25 yrs). Established history (15+ yrs). Established history (15+ yrs). Established history (23+ yrs). Established history (15+ yrs). Established history (15+ yrs). Point 3 Rating: 1★ (lower mid). Rating: 2★ (upper mid). Rating: 1★ (lower mid). Rating: 1★ (bottom quartile). Top rated. Rating: 5★ (top quartile). Rating: 1★ (bottom quartile). Rating: 1★ (bottom quartile). Rating: 2★ (upper mid). Point 4 Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Point 5 5Y return: 10.08% (bottom quartile). 5Y return: 10.59% (bottom quartile). 5Y return: 11.74% (upper mid). 5Y return: 11.25% (lower mid). 5Y return: 15.19% (top quartile). 5Y return: 15.08% (top quartile). 5Y return: 10.81% (bottom quartile). 5Y return: 11.21% (lower mid). 5Y return: 11.31% (upper mid). Point 6 3Y return: 9.55% (bottom quartile). 3Y return: 10.14% (bottom quartile). 3Y return: 20.28% (upper mid). 3Y return: 11.77% (lower mid). 3Y return: 21.99% (top quartile). 3Y return: 21.73% (top quartile). 3Y return: 11.23% (bottom quartile). 3Y return: 11.88% (upper mid). 3Y return: 11.73% (lower mid). Point 7 1Y return: 0.01% (bottom quartile). 1Y return: 0.54% (bottom quartile). 1Y return: 16.16% (top quartile). 1Y return: 2.66% (lower mid). 1Y return: 9.59% (top quartile). 1Y return: 9.51% (upper mid). 1Y return: 2.15% (bottom quartile). 1Y return: 2.78% (upper mid). 1Y return: 2.58% (lower mid). Point 8 1M return: 3.21% (lower mid). 1M return: 3.14% (bottom quartile). 1M return: 3.68% (upper mid). 1M return: 3.26% (upper mid). 1M return: 8.15% (top quartile). 1M return: 8.17% (top quartile). 1M return: 3.20% (bottom quartile). 1M return: 3.23% (lower mid). 1M return: 3.20% (bottom quartile). Point 9 Alpha: -1.13 (bottom quartile). Alpha: -0.53 (top quartile). Alpha: -1.03 (bottom quartile). Alpha: -0.59 (upper mid). Alpha: -0.77 (lower mid). Alpha: -0.83 (lower mid). Alpha: -1.12 (bottom quartile). Alpha: -0.47 (top quartile). Alpha: -0.64 (upper mid). Point 10 Sharpe: -0.79 (bottom quartile). Sharpe: -0.75 (bottom quartile). Sharpe: 1.04 (top quartile). Sharpe: -0.63 (lower mid). Sharpe: -0.51 (top quartile). Sharpe: -0.52 (upper mid). Sharpe: -0.66 (bottom quartile). Sharpe: -0.62 (upper mid). Sharpe: -0.63 (lower mid). LIC MF Index Fund Sensex
Nippon India Index Fund - Sensex Plan
IDBI Nifty Index Fund
Franklin India Index Fund Nifty Plan
ICICI Prudential Nifty Next 50 Index Fund
IDBI Nifty Junior Index Fund
LIC MF Index Fund Nifty
Nippon India Index Fund - Nifty Plan
Bandhan Nifty Fund
All the funds mentioned above are ideal, we are giving you detailed analysis of 5 funds.
The main investment objective of the fund is to generate returns commensurate with the performance of the index either Nifty / Sensex based on the plans by investing in the respective index stocks subject to tracking errors. Research Highlights for LIC MF Index Fund Sensex Below is the key information for LIC MF Index Fund Sensex Returns up to 1 year are on The primary investment objective of the scheme is to replicate the composition of the Sensex, with a view to generate returns that are commensurate with the performance of the Sensex, subject to tracking errors. Research Highlights for Nippon India Index Fund - Sensex Plan Below is the key information for Nippon India Index Fund - Sensex Plan Returns up to 1 year are on The investment objective of the scheme is to invest in the stocks and equity related instruments comprising the S&P CNX Nifty Index in the same weights as these stocks represented in the Index with the intent to replicate the performance of the Total Returns Index of S&P CNX Nifty index. The scheme will adopt a passive investment strategy and will seek to achieve the investment objective by minimizing the tracking error between the S&P CNX Nifty index (Total Returns Index) and the scheme. Research Highlights for IDBI Nifty Index Fund Below is the key information for IDBI Nifty Index Fund Returns up to 1 year are on The Investment Objective of the Scheme is to invest in companies whose securities are included in the Nifty and subject to tracking errors, endeavouring to attain results commensurate with the Nifty 50 under NSENifty Plan Research Highlights for Franklin India Index Fund Nifty Plan Below is the key information for Franklin India Index Fund Nifty Plan Returns up to 1 year are on The fund's objective is to invest in companies whose securities are included in Nifty Junior Index and to endeavor to achieve the returns of the above index as closely as possible, though subject to tracking error. The fund intends to track only 90-95% of the Index i.e. it will always keep cash balance between 5-10% of the Net Asset to meet the redemption and other liquidity requirements. However, as and when the liquidity in the Index improves the fund intends to track up to 100% of the Index. The fund will not seek to outperform the CNX Nifty Junior. The objective is that the performance of the NAV of the fund should closely track the performance of the CNX Nifty Junior over the same period subject to tracking error. Research Highlights for ICICI Prudential Nifty Next 50 Index Fund Below is the key information for ICICI Prudential Nifty Next 50 Index Fund Returns up to 1 year are on 1. LIC MF Index Fund Sensex
LIC MF Index Fund Sensex
Growth Launch Date 14 Nov 02 NAV (17 Apr 26) ₹146.426 ↑ 0.94 (0.64 %) Net Assets (Cr) ₹85 on 31 Mar 26 Category Others - Index Fund AMC LIC Mutual Fund Asset Mgmt Co Ltd Rating ☆ Risk Moderately High Expense Ratio 0.98 Sharpe Ratio -0.79 Information Ratio -10.54 Alpha Ratio -1.13 Min Investment 5,000 Min SIP Investment 1,000 Exit Load 0-1 Months (1%),1 Months and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Mar 21 ₹10,000 31 Mar 22 ₹11,818 31 Mar 23 ₹11,937 31 Mar 24 ₹14,941 31 Mar 25 ₹15,708 31 Mar 26 ₹14,615 Returns for LIC MF Index Fund Sensex
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Apr 26 Duration Returns 1 Month 3.2% 3 Month -6.2% 6 Month -6.7% 1 Year 0% 3 Year 9.6% 5 Year 10.1% 10 Year 15 Year Since launch 12.6% Historical performance (Yearly) on absolute basis
Year Returns 2024 9.1% 2023 8.2% 2022 19% 2021 4.6% 2020 21.9% 2019 15.9% 2018 14.6% 2017 5.6% 2016 27.4% 2015 1.6% Fund Manager information for LIC MF Index Fund Sensex
Name Since Tenure Nikhil Kapoor 7 Apr 26 0 Yr. Data below for LIC MF Index Fund Sensex as on 31 Mar 26
Asset Allocation
Asset Class Value Cash 0.79% Equity 99.21% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Mar 09 | HDFCBANK13% ₹11 Cr 151,442
↑ 8,831 Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 09 | RELIANCE11% ₹9 Cr 67,455
↑ 4,068 ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 09 | 53217410% ₹9 Cr 71,076
↑ 4,145 Bharti Airtel Ltd (Communication Services)
Equity, Since 30 Apr 09 | BHARTIARTL6% ₹5 Cr 27,788
↑ 1,620 Infosys Ltd (Technology)
Equity, Since 31 Mar 09 | INFY5% ₹4 Cr 35,547
↑ 2,072 Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Mar 09 | LT5% ₹4 Cr 11,645
↑ 747 State Bank of India (Financial Services)
Equity, Since 31 Mar 09 | SBIN5% ₹4 Cr 41,369
↑ 2,633 Axis Bank Ltd (Financial Services)
Equity, Since 31 Dec 13 | 5322154% ₹3 Cr 28,339
↑ 1,652 ITC Ltd (Consumer Defensive)
Equity, Since 30 Sep 11 | ITC3% ₹3 Cr 95,889
↑ 6,022 Mahindra & Mahindra Ltd (Consumer Cyclical)
Equity, Since 31 Mar 12 | M&M3% ₹3 Cr 8,908
↑ 519 2. Nippon India Index Fund - Sensex Plan
Nippon India Index Fund - Sensex Plan
Growth Launch Date 28 Sep 10 NAV (17 Apr 26) ₹39.9458 ↑ 0.26 (0.65 %) Net Assets (Cr) ₹849 on 31 Mar 26 Category Others - Index Fund AMC Nippon Life Asset Management Ltd. Rating ☆☆ Risk Moderately High Expense Ratio 0.49 Sharpe Ratio -0.75 Information Ratio -10.21 Alpha Ratio -0.53 Min Investment 5,000 Min SIP Investment 100 Exit Load 0-7 Days (0.25%),7 Days and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Mar 21 ₹10,000 31 Mar 22 ₹11,874 31 Mar 23 ₹12,021 31 Mar 24 ₹15,110 31 Mar 25 ₹15,984 31 Mar 26 ₹14,947 Returns for Nippon India Index Fund - Sensex Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Apr 26 Duration Returns 1 Month 3.1% 3 Month -6.1% 6 Month -6.5% 1 Year 0.5% 3 Year 10.1% 5 Year 10.6% 10 Year 15 Year Since launch 9.3% Historical performance (Yearly) on absolute basis
Year Returns 2024 9.8% 2023 8.9% 2022 19.5% 2021 5% 2020 22.4% 2019 16.6% 2018 14.2% 2017 6.2% 2016 27.9% 2015 2% Fund Manager information for Nippon India Index Fund - Sensex Plan
Name Since Tenure Himanshu Mange 23 Dec 23 2.27 Yr. Data below for Nippon India Index Fund - Sensex Plan as on 31 Mar 26
Asset Allocation
Asset Class Value Cash 0.11% Equity 99.89% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Oct 10 | HDFCBANK13% ₹111 Cr 1,518,640
↑ 21,521 Reliance Industries Ltd (Energy)
Equity, Since 31 Oct 10 | RELIANCE11% ₹91 Cr 674,401
↑ 8,967 ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 10 | 53217410% ₹86 Cr 713,414
↑ 10,621 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Oct 10 | BHARTIARTL6% ₹51 Cr 284,169
↑ 9,386 Infosys Ltd (Technology)
Equity, Since 31 Oct 10 | INFY5% ₹43 Cr 347,618
↓ -3,752 Larsen & Toubro Ltd (Industrials)
Equity, Since 29 Feb 12 | LT5% ₹41 Cr 116,543
↑ 1,552 State Bank of India (Financial Services)
Equity, Since 31 Oct 10 | SBIN5% ₹41 Cr 414,013
↑ 5,504 Axis Bank Ltd (Financial Services)
Equity, Since 31 Dec 13 | 5322154% ₹33 Cr 284,900
↑ 4,098 ITC Ltd (Consumer Defensive)
Equity, Since 29 Feb 12 | ITC3% ₹28 Cr 961,582
↑ 12,891 Mahindra & Mahindra Ltd (Consumer Cyclical)
Equity, Since 31 Oct 10 | M&M3% ₹26 Cr 89,240
↑ 1,187 3. IDBI Nifty Index Fund
IDBI Nifty Index Fund
Growth Launch Date 25 Jun 10 NAV (28 Jul 23) ₹36.2111 ↓ -0.02 (-0.06 %) Net Assets (Cr) ₹208 on 30 Jun 23 Category Others - Index Fund AMC IDBI Asset Management Limited Rating ☆ Risk Moderately High Expense Ratio 0.9 Sharpe Ratio 1.04 Information Ratio -3.93 Alpha Ratio -1.03 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Growth of 10,000 investment over the years.
Date Value 31 Mar 21 ₹10,000 31 Mar 22 ₹11,835 31 Mar 23 ₹11,794 Returns for IDBI Nifty Index Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Apr 26 Duration Returns 1 Month 3.7% 3 Month 9.1% 6 Month 11.9% 1 Year 16.2% 3 Year 20.3% 5 Year 11.7% 10 Year 15 Year Since launch 10.3% Historical performance (Yearly) on absolute basis
Year Returns 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 Fund Manager information for IDBI Nifty Index Fund
Name Since Tenure Data below for IDBI Nifty Index Fund as on 30 Jun 23
Asset Allocation
Asset Class Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 4. Franklin India Index Fund Nifty Plan
Franklin India Index Fund Nifty Plan
Growth Launch Date 4 Aug 00 NAV (17 Apr 26) ₹196.488 ↑ 1.26 (0.65 %) Net Assets (Cr) ₹678 on 31 Mar 26 Category Others - Index Fund AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆ Risk Moderately High Expense Ratio 0.63 Sharpe Ratio -0.63 Information Ratio -3.46 Alpha Ratio -0.59 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-30 Days (1%),30 Days and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Mar 21 ₹10,000 31 Mar 22 ₹11,912 31 Mar 23 ₹11,906 31 Mar 24 ₹15,358 31 Mar 25 ₹16,283 31 Mar 26 ₹15,549 Returns for Franklin India Index Fund Nifty Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Apr 26 Duration Returns 1 Month 3.3% 3 Month -5.3% 6 Month -5.3% 1 Year 2.7% 3 Year 11.8% 5 Year 11.2% 10 Year 15 Year Since launch 12.3% Historical performance (Yearly) on absolute basis
Year Returns 2024 11.3% 2023 9.5% 2022 20.2% 2021 4.9% 2020 24.3% 2019 14.7% 2018 12% 2017 3.2% 2016 28.3% 2015 3.3% Fund Manager information for Franklin India Index Fund Nifty Plan
Name Since Tenure Sandeep Manam 18 Oct 21 4.45 Yr. Shyam Sriram 26 Sep 24 1.51 Yr. Data below for Franklin India Index Fund Nifty Plan as on 31 Mar 26
Asset Allocation
Asset Class Value Cash 0.22% Equity 99.78% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jan 03 | HDFCBANK12% ₹90 Cr 1,016,819
↑ 6,414 ICICI Bank Ltd (Financial Services)
Equity, Since 31 Jan 10 | ICICIBANK9% ₹65 Cr 474,792
↑ 2,995 Reliance Industries Ltd (Energy)
Equity, Since 31 Jan 03 | RELIANCE8% ₹63 Cr 448,821
↑ 2,831 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Mar 04 | BHARTIARTL5% ₹35 Cr 185,222
↑ 1,168 Larsen & Toubro Ltd (Industrials)
Equity, Since 30 Jun 12 | LT4% ₹33 Cr 78,065
↑ 492 State Bank of India (Financial Services)
Equity, Since 31 Jan 03 | SBIN4% ₹33 Cr 275,799
↑ 1,740 Infosys Ltd (Technology)
Equity, Since 29 Feb 12 | INFY4% ₹30 Cr 232,842
↑ 1,469 Axis Bank Ltd (Financial Services)
Equity, Since 30 Jun 09 | AXISBANK3% ₹26 Cr 190,511
↑ 1,202 Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 Mar 12 | KOTAKBANK3% ₹20 Cr 488,789
↑ 3,083 Mahindra & Mahindra Ltd (Consumer Cyclical)
Equity, Since 28 Feb 07 | M&M3% ₹20 Cr 59,339
↑ 374 5. ICICI Prudential Nifty Next 50 Index Fund
ICICI Prudential Nifty Next 50 Index Fund
Growth Launch Date 25 Jun 10 NAV (17 Apr 26) ₹61.7598 ↑ 0.86 (1.42 %) Net Assets (Cr) ₹7,604 on 31 Mar 26 Category Others - Index Fund AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆☆ Risk Moderately High Expense Ratio 0.66 Sharpe Ratio -0.51 Information Ratio -6.66 Alpha Ratio -0.77 Min Investment 5,000 Min SIP Investment 100 Exit Load 0-7 Days (0.25%),7 Days and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Mar 21 ₹10,000 31 Mar 22 ₹12,037 31 Mar 23 ₹11,065 31 Mar 24 ₹17,741 31 Mar 25 ₹18,397 31 Mar 26 ₹17,649 Returns for ICICI Prudential Nifty Next 50 Index Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Apr 26 Duration Returns 1 Month 8.2% 3 Month 2.2% 6 Month 1.4% 1 Year 9.6% 3 Year 22% 5 Year 15.2% 10 Year 15 Year Since launch 12.2% Historical performance (Yearly) on absolute basis
Year Returns 2024 2.1% 2023 27.2% 2022 26.3% 2021 0.1% 2020 29.5% 2019 14.3% 2018 0.6% 2017 -8.8% 2016 45.7% 2015 7.6% Fund Manager information for ICICI Prudential Nifty Next 50 Index Fund
Name Since Tenure Nishit Patel 18 Jan 21 5.2 Yr. Ajaykumar Solanki 1 Feb 24 2.16 Yr. Ashwini Shinde 18 Dec 24 1.28 Yr. Data below for ICICI Prudential Nifty Next 50 Index Fund as on 31 Mar 26
Asset Allocation
Asset Class Value Cash 0.86% Equity 99.14% Top Securities Holdings / Portfolio
Name Holding Value Quantity Vedanta Ltd (Basic Materials)
Equity, Since 31 Mar 21 | 5002955% ₹392 Cr 5,992,168
↓ -132,011 Tata Motors Ltd (Consumer Cyclical)
Equity, Since 31 Mar 26 | TMCV4% ₹291 Cr 7,370,232
↑ 7,370,232 TVS Motor Co Ltd (Consumer Cyclical)
Equity, Since 30 Sep 23 | 5323434% ₹279 Cr 828,186
↓ -19,412 Divi's Laboratories Ltd (Healthcare)
Equity, Since 30 Sep 24 | DIVISLAB4% ₹267 Cr 448,147
↓ -10,535 Hindustan Aeronautics Ltd Ordinary Shares (Industrials)
Equity, Since 30 Sep 22 | HAL3% ₹233 Cr 669,065
↓ -15,882 Britannia Industries Ltd (Consumer Defensive)
Equity, Since 31 Mar 25 | 5008253% ₹225 Cr 415,480
↓ -10,277 Tata Power Co Ltd (Utilities)
Equity, Since 31 Aug 22 | 5004003% ₹224 Cr 5,903,688
↓ -158,524 Adani Power Ltd (Utilities)
Equity, Since 31 Mar 24 | 5330963% ₹219 Cr 14,586,133
↑ 344,570 Cummins India Ltd (Industrials)
Equity, Since 31 Mar 26 | 5004803% ₹214 Cr 476,362
↑ 476,362 Avenue Supermarts Ltd (Consumer Defensive)
Equity, Since 30 Sep 17 | 5403763% ₹205 Cr 519,204
↓ -12,360
Popular Indices Tracked by Index Mutual Funds in India
Index mutual funds do not have official sub-categories under SEBI. However, fund houses offer index funds that track different market benchmarks.
Some commonly tracked indices include:
- Nifty 50 and Sensex – represent India’s largest and most stable companies
- Nifty Next 50 – companies just below the top 50, offering higher growth but more Volatility
- Sectoral indices – such as banking, IT, pharma or PSU indices
- International indices – like Nasdaq 100 or S&P 500 for global exposure
- Debt indices – government bond or PSU bond indices such as Bharat Bond
All these funds follow the same principle —they replicate an index, not pick stocks.
Index Funds vs ETFs (Exchange Traded Funds)
| Parameter | Index Funds | ETFs |
|---|---|---|
| Investment method | SIP or lump sum | Exchange traded |
| Demat account | Not required | Required |
| Pricing | End-of-day NAV | Real-time price |
| Suitable for | SIP investors | Traders & long-term investors |
Expense Ratio and Tracking Error: Why They Matter
Two funds tracking the same index can give different returns.
Always check:
- Expense ratio → lower is better
- Tracking error → closer to index = better replication
Even a 0.3% annual difference can reduce returns by lakhs over 20 years.
Why to Invest in Index Funds in India?
Some of the benefits of investing in Index Funds are:
1. Diversification
An index is a collection of different stocks and securities. They offer diversification to the investor which is the main motive of Asset Allocation. This ensures that the investor does not have all their eggs in one basket.
2. Less Expenses
Index funds have lower operating expenses compared to other mutual fund schemes. Here, the fund managers do not require a separate team of research analysts to carry out in-depth research of the companies, which usually involves significant costs. In index funds, the manager just needs to replicate the index. Therefore, the expense ratio is lower in the case of index funds.
3. Less Managerial Influence
Since the fund simply follows the movement of a particular index, the manager doesn’t have to choose what stocks to invest in. This is a plus point since the manager’s own style of investing (which may not always align with market trends) does not influence the fund.
Risks of Investing in Index Funds
While index funds are cost-efficient, they are not risk-free.
Market Risk: Returns depend entirely on index performance. If the market falls, so does the NAV.
No Flexibility: Since funds can’t deviate from the index, they may miss opportunities outside of it.
Tracking Error: Slight deviations from the index due to expenses or fund structure.
Experts suggest allocating 5–10% of your Portfolio to index funds for long-term wealth creation while balancing risks.
Who Should Invest in Index Funds?
- Long-term SIP investors
- Retirement planners
- Investors who prefer low cost and simplicity
- Those who don’t want fund manager risk
How to Invest in Index Mutual Funds Online?
Open Free Investment Account for Lifetime at Fincash.com.
Complete your Registration and KYC Process
Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!
FAQs
1. Are index mutual funds good for long-term investment?
A: Yes. Index funds are ideal for long-term investing due to low cost, diversification and consistent market-linked returns.
2. Can index funds beat active funds?
A: Over long periods, many index funds outperform most active funds after adjusting for expenses.
3. Are index funds safe?
A: They are subject to market risk but safer than individual stocks due to diversification.
4. Is SIP better than lump sum in index funds?
A: SIP is better for most investors as it reduces market timing risk and builds discipline.
Conclusion
Index mutual funds have transformed the way Indians invest. With minimal costs, transparent portfolios and consistent performance, they offer one of the most efficient paths to long-term wealth creation. Rather than chasing short-term outperformers, index investing allows you to participate in India’s economic growth in a simple and disciplined manner. For investors seeking stability, low expenses and stress-free investing, index mutual funds remain one of the smartest choices.
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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Quite detailed review which helps in deciding which is a better performing index fund