Table of Contents
What are Passive Funds?
Passive funds are a type of funds that consistently tracks a Market index to allow a fund get maximum gains. It invests in a Portfolio that replicates a Market Index like Nifty, the Sensex, etc. All the securities along with their proportion in the portfolio will be the same as the index the fund is tracking.
In passive funds, the fund manager does not actively choose what stocks will make up the fund. This is one of the reasons passive funds are easier to invest than active funds. Investors buy passive funds when they want their returns to be in line with the market. These funds are low-cost funds as there are no costs involved in selecting stocks and researching.
Types of Passive Funds
Passive funds are of two types, such as -
1. Index Funds
Index Funds are an open-ended scheme where the investors buy and redeem units of the Mutual Funds at the net-asset values. In other words, the performance of an index fund is dependent on the performance of a particular index. Index funds contain shares in a similar proportion as they are in a particular index.
2. Exchange Traded Funds (ETFs)
The units of exchange-traded funds are randomly listed on a stock exchange. Investors buy and sell units at real-time prices through Demat account.
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Difference Between Passive Funds and Active Funds
There are specific differences in the way they function and affect the investor.
The tabular differentiates between passive funds and active funds:
| Passive Funds | Active Funds |
|---|---|
| The fund manager does not actively participate in selecting funds | Fund managers commit to a lot of research and take steps accordingly to select funds in various securities based on market performance |
| Costs less | Costs more |
| Popularity because of the low-expense ratio | Costlier management makes it less popular |
How Passive Funds is Gaining Trust?
In 2019, Indian investors found that passive mutual funds were trustworthy. The total assets managed by passive funds, including gold and ETFs along with other index funds were huge. It was found that it stood at Rs. 177,181 crore on November 30, 2019. The Association of Mutual Funds in India (AMFI) stated that index funds had gathered an AUM of Rs. 7717 crore on November 2019. Passive large-cap ETFs offer returns of 11.53% compared to actively managed Large cap funds that offered 10.19%.
gold ETFs stood at Rs. 5,540.40 crore as of November 2019. This comes in comparison to Rs. 4,571 crore in December 2018. The AUM of other ETFs
stood at Rs. 1,63,923.66 crore, as compared to Rs. 1,07,363 crore at the end of 2018. A large part of 2019 witnessed that large-cap schemes were at the top of return charts. Even in 2020, nine out of the top 15 large-cap schemes are passive funds.
Passive Funds Amid Coronavirus Pandemic
With the current situation across the globe, the financial markets are facing issues of deep concern. While investors were willing to take a risk in the past, today’s conditions have pushed the majority of the investors to look for a Safe Haven. This means they are looking for an investment that will yield higher returns or at least stable returns. Several investors are now looking to invest through passive modes such as exchange-traded funds or index funds. As per AMFI, Inflow into the index funds faced an all-time high of Rs. 2076.5 crore in March 2020.
Best Passive Funds 2024 - 2025
With the growing popularity of passive mutual funds, the chances of gaining higher returns are higher. Here are the best passive mutual funds you can choose to invest:
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2023 (%) Nippon India Index Fund - Sensex Plan Growth ₹41.2948
↓ -0.41 ₹745 3.3 12.3 26.7 12.6 17.3 19.5 LIC MF Index Fund Sensex Growth ₹152.652
↓ -1.52 ₹86 3.1 11.9 26 12.2 16.9 19 Franklin India Index Fund Nifty Plan Growth ₹200.479
↓ -1.88 ₹728 4.2 13.1 29.9 13.5 17.7 20.2 SBI Nifty Index Fund Growth ₹219.537
↓ -2.07 ₹8,484 4.1 13.2 30.1 13.6 17.9 20.7 IDBI Nifty Index Fund Growth ₹36.2111
↓ -0.02 ₹208 9.1 11.9 16.2 20.3 11.7 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 4 Oct 24
*Below is the list for Index Mutual Funds having atleast 15 Crore or more in Net Assets.
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. Nippon India Index Fund - Sensex Plan is a Others - Index Fund fund was launched on 28 Sep 10. It is a fund with Moderately High risk and has given a Below is the key information for Nippon India Index Fund - Sensex Plan Returns up to 1 year are on 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. LIC MF Index Fund Sensex is a Others - Index Fund fund was launched on 14 Nov 02. It is a fund with Moderately High risk and has given a Below is the key information for LIC MF Index Fund Sensex 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 Franklin India Index Fund Nifty Plan is a Others - Index Fund fund was launched on 4 Aug 00. It is a fund with Moderately High risk and has given a Below is the key information for Franklin India Index Fund Nifty Plan Returns up to 1 year are on The scheme will adopt a passive investment strategy. The scheme will
invest in stocks comprising the Nifty 50 Index in the same proportion as in the
index with the objective of achieving returns equivalent to the Total Returns
Index of Nifty 50 Index by minimizing the performance difference between the
benchmark index and the scheme. The Total Returns Index is an index that
reflects the returns on the index from index gain/loss plus dividend payments
by the constituent stocks. SBI Nifty Index Fund is a Others - Index Fund fund was launched on 17 Jan 02. It is a fund with Moderately High risk and has given a Below is the key information for SBI Nifty Index Fund 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. IDBI Nifty Index Fund is a Others - Index Fund fund was launched on 25 Jun 10. It is a fund with Moderately High risk and has given a Below is the key information for IDBI Nifty Index Fund Returns up to 1 year are on 1. Nippon India Index Fund - Sensex Plan
CAGR/Annualized return of 10.7% since its launch. Ranked 74 in Index Fund category. Return for 2023 was 19.5% , 2022 was 5% and 2021 was 22.4% . Nippon India Index Fund - Sensex Plan
Growth Launch Date 28 Sep 10 NAV (04 Oct 24) ₹41.2948 ↓ -0.41 (-0.98 %) Net Assets (Cr) ₹745 on 31 Aug 24 Category Others - Index Fund AMC Nippon Life Asset Management Ltd. Rating ☆☆ Risk Moderately High Expense Ratio 0.58 Sharpe Ratio 1.69 Information Ratio -8.01 Alpha Ratio -0.58 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 30 Sep 19 ₹10,000 30 Sep 20 ₹9,890 30 Sep 21 ₹15,421 30 Sep 22 ₹15,070 30 Sep 23 ₹17,365 30 Sep 24 ₹22,376 Returns for Nippon India Index Fund - Sensex Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Oct 24 Duration Returns 1 Month -0.1% 3 Month 3.3% 6 Month 12.3% 1 Year 26.7% 3 Year 12.6% 5 Year 17.3% 10 Year 15 Year Since launch 10.7% Historical performance (Yearly) on absolute basis
Year Returns 2023 19.5% 2022 5% 2021 22.4% 2020 16.6% 2019 14.2% 2018 6.2% 2017 27.9% 2016 2% 2015 -4.7% 2014 28.7% Fund Manager information for Nippon India Index Fund - Sensex Plan
Name Since Tenure Himanshu Mange 23 Dec 23 0.69 Yr. Data below for Nippon India Index Fund - Sensex Plan as on 31 Aug 24
Asset Allocation
Asset Class Value Cash 0.03% Equity 99.97% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Oct 10 | 50018013% ₹97 Cr 593,345
↑ 5,674 Reliance Industries Ltd (Energy)
Equity, Since 31 Oct 10 | 50032511% ₹81 Cr 266,662
↑ 2,550 ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 10 | 5321749% ₹68 Cr 554,096
↑ 5,298 Infosys Ltd (Technology)
Equity, Since 31 Oct 10 | 5002097% ₹55 Cr 284,712
↑ 2,722 ITC Ltd (Consumer Defensive)
Equity, Since 29 Feb 12 | 5008755% ₹37 Cr 728,265
↑ 6,963 Tata Consultancy Services Ltd (Technology)
Equity, Since 31 Oct 10 | TCS5% ₹36 Cr 79,858
↑ 764 Larsen & Toubro Ltd (Industrials)
Equity, Since 29 Feb 12 | 5005105% ₹34 Cr 92,113
↑ 880 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Oct 10 | 5324544% ₹33 Cr 210,202
↑ 2,010 Axis Bank Ltd (Financial Services)
Equity, Since 31 Dec 13 | 5322153% ₹26 Cr 221,524
↑ 2,118 State Bank of India (Financial Services)
Equity, Since 31 Oct 10 | 5001123% ₹25 Cr 302,508
↑ 2,892 2. LIC MF Index Fund Sensex
CAGR/Annualized return of 13.8% since its launch. Ranked 79 in Index Fund category. Return for 2023 was 19% , 2022 was 4.6% and 2021 was 21.9% . LIC MF Index Fund Sensex
Growth Launch Date 14 Nov 02 NAV (04 Oct 24) ₹152.652 ↓ -1.52 (-0.99 %) Net Assets (Cr) ₹86 on 31 Aug 24 Category Others - Index Fund AMC LIC Mutual Fund Asset Mgmt Co Ltd Rating ☆ Risk Moderately High Expense Ratio 0.98 Sharpe Ratio 1.65 Information Ratio 0 Alpha Ratio 0 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 30 Sep 19 ₹10,000 30 Sep 20 ₹9,891 30 Sep 21 ₹15,314 30 Sep 22 ₹14,902 30 Sep 23 ₹17,143 30 Sep 24 ₹21,972 Returns for LIC MF Index Fund Sensex
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Oct 24 Duration Returns 1 Month -0.2% 3 Month 3.1% 6 Month 11.9% 1 Year 26% 3 Year 12.2% 5 Year 16.9% 10 Year 15 Year Since launch 13.8% Historical performance (Yearly) on absolute basis
Year Returns 2023 19% 2022 4.6% 2021 21.9% 2020 15.9% 2019 14.6% 2018 5.6% 2017 27.4% 2016 1.6% 2015 -5.4% 2014 29.3% Fund Manager information for LIC MF Index Fund Sensex
Name Since Tenure Sumit Bhatnagar 3 Oct 23 0.91 Yr. Data below for LIC MF Index Fund Sensex as on 31 Aug 24
Asset Allocation
Asset Class Value Equity 100.03% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Mar 09 | 50018013% ₹11 Cr 68,629
↓ -377 Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 09 | 50032511% ₹9 Cr 31,162
↓ -130 ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 09 | 5321749% ₹8 Cr 64,515
↑ 34 Infosys Ltd (Technology)
Equity, Since 31 Mar 09 | 5002097% ₹6 Cr 33,085 ITC Ltd (Consumer Defensive)
Equity, Since 30 Sep 11 | 5008755% ₹4 Cr 84,740
↑ 1,038 Tata Consultancy Services Ltd (Technology)
Equity, Since 31 Mar 09 | TCS5% ₹4 Cr 9,257
↑ 61 Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Mar 09 | 5005105% ₹4 Cr 10,727
↑ 95 Bharti Airtel Ltd (Communication Services)
Equity, Since 30 Apr 09 | 5324544% ₹4 Cr 24,256
↓ -149 Axis Bank Ltd (Financial Services)
Equity, Since 31 Dec 13 | 5322154% ₹3 Cr 25,783
↑ 06 State Bank of India (Financial Services)
Equity, Since 31 Mar 09 | 5001123% ₹3 Cr 35,037
↓ -335 3. Franklin India Index Fund Nifty Plan
CAGR/Annualized return of 13.3% since its launch. Ranked 76 in Index Fund category. Return for 2023 was 20.2% , 2022 was 4.9% and 2021 was 24.3% . Franklin India Index Fund Nifty Plan
Growth Launch Date 4 Aug 00 NAV (04 Oct 24) ₹200.479 ↓ -1.88 (-0.93 %) Net Assets (Cr) ₹728 on 31 Aug 24 Category Others - Index Fund AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆ Risk Moderately High Expense Ratio 0.62 Sharpe Ratio 2.02 Information Ratio -4.3 Alpha Ratio -0.69 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 30 Sep 19 ₹10,000 30 Sep 20 ₹9,782 30 Sep 21 ₹15,309 30 Sep 22 ₹14,959 30 Sep 23 ₹17,227 30 Sep 24 ₹22,748 Returns for Franklin India Index Fund Nifty Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Oct 24 Duration Returns 1 Month -0.1% 3 Month 4.2% 6 Month 13.1% 1 Year 29.9% 3 Year 13.5% 5 Year 17.7% 10 Year 15 Year Since launch 13.3% Historical performance (Yearly) on absolute basis
Year Returns 2023 20.2% 2022 4.9% 2021 24.3% 2020 14.7% 2019 12% 2018 3.2% 2017 28.3% 2016 3.3% 2015 -3.6% 2014 31.2% Fund Manager information for Franklin India Index Fund Nifty Plan
Name Since Tenure Varun Sharma 30 Nov 15 8.76 Yr. Sandeep Manam 18 Oct 21 2.87 Yr. Data below for Franklin India Index Fund Nifty Plan as on 31 Aug 24
Asset Allocation
Asset Class Value Cash 0.6% Equity 99.4% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jan 03 | 50018011% ₹80 Cr 489,818 Reliance Industries Ltd (Energy)
Equity, Since 31 Jan 03 | 5003259% ₹66 Cr 220,094 ICICI Bank Ltd (Financial Services)
Equity, Since 31 Jan 10 | 5321748% ₹56 Cr 458,310 Infosys Ltd (Technology)
Equity, Since 29 Feb 12 | 5002096% ₹45 Cr 233,839 Tata Consultancy Services Ltd (Technology)
Equity, Since 28 Feb 05 | TCS4% ₹30 Cr 65,834 ITC Ltd (Consumer Defensive)
Equity, Since 31 Mar 11 | 5008754% ₹29 Cr 586,607 Larsen & Toubro Ltd (Industrials)
Equity, Since 30 Jun 12 | 5005104% ₹28 Cr 76,093 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Mar 04 | 5324544% ₹27 Cr 172,998 Axis Bank Ltd (Financial Services)
Equity, Since 30 Jun 09 | 5322153% ₹22 Cr 185,007 State Bank of India (Financial Services)
Equity, Since 31 Jan 03 | 5001123% ₹20 Cr 249,522 4. SBI Nifty Index Fund
CAGR/Annualized return of 14.8% since its launch. Ranked 75 in Index Fund category. Return for 2023 was 20.7% , 2022 was 5.1% and 2021 was 24.7% . SBI Nifty Index Fund
Growth Launch Date 17 Jan 02 NAV (04 Oct 24) ₹219.537 ↓ -2.07 (-0.93 %) Net Assets (Cr) ₹8,484 on 31 Aug 24 Category Others - Index Fund AMC SBI Funds Management Private Limited Rating ☆ Risk Moderately High Expense Ratio 0.5 Sharpe Ratio 2.03 Information Ratio -21.52 Alpha Ratio -0.56 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-15 Days (0.2%),15 Days and above(NIL) Growth of 10,000 investment over the years.
Date Value 30 Sep 19 ₹10,000 30 Sep 20 ₹9,763 30 Sep 21 ₹15,365 30 Sep 22 ₹15,025 30 Sep 23 ₹17,348 30 Sep 24 ₹22,942 Returns for SBI Nifty Index Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Oct 24 Duration Returns 1 Month -0.2% 3 Month 4.1% 6 Month 13.2% 1 Year 30.1% 3 Year 13.6% 5 Year 17.9% 10 Year 15 Year Since launch 14.8% Historical performance (Yearly) on absolute basis
Year Returns 2023 20.7% 2022 5.1% 2021 24.7% 2020 14.6% 2019 12.5% 2018 3.8% 2017 29.1% 2016 3.4% 2015 -4.2% 2014 30.5% Fund Manager information for SBI Nifty Index Fund
Name Since Tenure Raviprakash Sharma 1 Feb 11 13.59 Yr. Pradeep Kesavan 1 Dec 23 0.75 Yr. Data below for SBI Nifty Index Fund as on 31 Aug 24
Asset Allocation
Asset Class Value Cash 0.1% Equity 99.9% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Mar 03 | 50018011% ₹934 Cr 5,704,344
↑ 105,842 Reliance Industries Ltd (Energy)
Equity, Since 31 Jan 03 | 5003259% ₹774 Cr 2,562,023
↑ 47,540 ICICI Bank Ltd (Financial Services)
Equity, Since 31 Jan 03 | 5321748% ₹655 Cr 5,328,758
↑ 98,874 Infosys Ltd (Technology)
Equity, Since 31 Jan 03 | 5002096% ₹532 Cr 2,735,638
↑ 50,756 ITC Ltd (Consumer Defensive)
Equity, Since 29 Feb 12 | 5008754% ₹351 Cr 6,996,867
↑ 129,824 Tata Consultancy Services Ltd (Technology)
Equity, Since 28 Feb 05 | TCS4% ₹349 Cr 767,238
↑ 14,235 Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Dec 04 | 5005104% ₹328 Cr 885,048
↑ 16,419 Bharti Airtel Ltd (Communication Services)
Equity, Since 29 Feb 04 | 5324544% ₹322 Cr 2,025,675
↑ 37,585 Axis Bank Ltd (Financial Services)
Equity, Since 28 Feb 10 | 5322153% ₹253 Cr 2,153,008
↑ 39,946 State Bank of India (Financial Services)
Equity, Since 31 Jan 03 | 5001123% ₹237 Cr 2,906,370
↑ 53,929 5. IDBI Nifty Index Fund
CAGR/Annualized return of 10.3% since its launch. Ranked 83 in Index Fund category. . 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 30 Sep 19 ₹10,000 30 Sep 20 ₹9,778 30 Sep 21 ₹15,230 30 Sep 22 ₹14,843 Returns for IDBI Nifty Index Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Oct 24 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 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 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
Conclusion
Passive funds are definitely proving to be a ray of hope for investors, especially in the current financial crisis. Before Investing in any passive mutual fund, make sure to read all schemes related documents carefully. This will help you gain an understanding of what to expect and what to give along with a sense of security.
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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