Index mutual funds basically replicate the stock exchange indices such as Sensex or Nifty.
If you avoid to risk your hard earned money and want to invest in an instrument that may provide you better returns as compared to inflation rate as well as traditional investment methods such as Fixed deposits, then you should go with Index funds.
If the stock market is going well, you would get a decent return around 10%-15% annually by investing in the index funds.
Since the focus of these funds are only to match the indices performance, there’s not much active funds manipulation, that results into lesser risk as compared to active equity based mutual funds.
If you are interested in investing your money in index funds, then go through this article as I have shortlisted the top 10 best index funds in India.
I have shortlisted the best index funds in 2 categories as below –
- Best Sensex index funds
- Best Nifty Index funds
Without any further ado, let’s get into the top performing index funds in India.
Best Index Funds in India 2022 (Sensex)
#1. HDFC Index Sensex Fund
HDFC Index Sensex fund is a high-performance mutual fund that gives you an annual return around 17% as per the current trailing results. The fund has outperformed since its inception and has given above 15% annual returns.
However, the risk factor for the index fund is also high.
Let’s see the last 3-year performance of the HDFC Index fund and other important details below –
#1. Last 3-year fund performance
#2. HDFC Index Sensex Fund Details
| Fund House: | HDFC Mutual Fund |
| Launch Date: | 17-Jul-2002 |
| Return Since Launch: | 15.17% |
| Benchmark: | S&P BSE Sensex 100 |
| Riskometer: | Very High |
| Return Grade: | High |
| Assets (AUM): | ₹ 1,963 Cr |
| Turnover: | 28.69% |
| Expense Ratio: | 0.30% |
| Tracking Error: | 0.21% |
#3. Last 10-year return yielded by the index fund
#4. Sector-wise allocation of funds and comparison with Index fund category allocation
#5. Top Portfolio Holdings
| Security Name | Holding (%) |
| Reliance Industries Ltd. | 12.75 |
| HDFC Bank Ltd. | 11.82 |
| Infosys Ltd. | 8.68 |
| HDFC Ltd. | 8.65 |
| ICICI Bank Ltd. | 7.80 |
| Tata Consultancy Services Ltd. | 5.76 |
| Kotak Mahindra Bank Ltd. | 4.41 |
| Axis Bank Ltd. | 3.61 |
| Hindustan Unilever Ltd. | 3.60 |
| ITC Ltd. | 3.37 |
#2. Tata Index Sensex Fund
Another great index fund that not only provides you high returns but also proved to have come-back from big losses over time to prevent losses.
The expense ratio of the sensex fund is among the lowest, which is 0.5% that means you will be paying very nominal charges for fund management.
If we talk about the performance, after March 2020 market crash, the Tata Sensex index fund has performed quite close to the index till now. The fund has yielded almost 15% return in the last 3 years.
Let’s see the last 3-year performance of the Tata Index fund (Sensex) and other important details below –
#1. Last 3-year fund performance
#2. Tata Index Sensex Fund Details
| Fund House: | Tata Mutual Fund |
| Launch Date: | 01-Jan-2013 |
| Return Since Launch: | 12.84% |
| Benchmark: | S&P BSE Sensex 100 |
| Riskometer: | Very High |
| Return Grade: | High |
| Assets (AUM): | ₹ 52 Cr |
| Turnover: | 22.97% |
| Expense Ratio: | 0.05% |
| Tracking Error: | 1.20% |
#3. Last 10-year return yielded by the index fund
#4. Sector-wise allocation of funds and comparison with Index fund category allocation
#5. Top Portfolio Holdings
| Security Name | Holding (%) |
| Reliance Industries Ltd. | 12.52 |
| HDFC Bank Ltd. | 11.73 |
| Infosys Ltd. | 8.69 |
| HDFC Ltd. | 8.55 |
| ICICI Bank Ltd. | 7.70 |
| Tata Consultancy Services Ltd. | 5.65 |
| Kotak Mahindra Bank Ltd. | 4.32 |
| Axis Bank Ltd. | 3.57 |
| Hindustan Unilever Ltd. | 3.54 |
| ITC Ltd. | 3.29 |
#3. Nippon India Index Sensex
Started in 2013 by Reliance, Nippon India Sensex Index Fund is another 4-start rating fund that is popular for consistent returns.
Mehul Dama is the fund manager of Nippon index fund who is very experienced and having great record of providing better returns to the investors.
Let’s see the last 3-year performance of the Nippon India Index Sensex fund and other important details below –
#1. Last 3-year fund performance
#2. Nippon India Index Sensex Details
| Fund House: | Nippon India Mutual Fund |
| Launch Date: | 01-Jan-2013 |
| Return Since Launch: | 12.81% |
| Benchmark: | S&P BSE Sensex 100 TRI |
| Riskometer: | Very High |
| Return Grade: | Average |
| Assets (AUM): | ₹ 129 Cr |
| Turnover: | 26.00% |
| Expense Ratio: | 0.10% |
| Tracking Error: | 1.05% |
#3. Last 10-year return yielded by the index fund
#4. Sector-wise allocation of funds and comparison with Index fund category allocation
#5. Top Portfolio Holdings
| Security Name | Holding (%) |
| Reliance Industries Ltd. | 12.44 |
| HDFC Bank Ltd. | 11.53 |
| Infosys Ltd. | 8.47 |
| Housing Development Finance Corporation Ltd. | 8.43 |
| ICICI Bank Ltd. | 7.61 |
| Tata Consultancy Services Ltd. | 5.62 |
| Kotak Mahindra Bank Ltd. | 4.30 |
| Axis Bank Ltd. | 3.52 |
| Hindustan Unilever Ltd. | 3.51 |
| ITC Ltd. | 3.29 |
Best Nifty Index Funds in India 2022
#4. IDFC Nifty Fund
IDFC Nifty fund is among the very first index funds started in India. The fund possess an AUM of approx. 280 crores. You can double your invested amount in around 5 years as per the past record of the index fund.
You can also exit the fund, anytime after initiating without paying any exit load fee if you are leaving within a week, which is not the case with most mutual funds.
Let’s see the last 3-year performance of the IDFC Nifty fund and other important details below –
#1. Last 3-year fund performance
#2. IDFC Nifty Fund Details
| Fund House: | IDFC Mutual Fund |
| Launch Date: | 01-Jan-2013 |
| Return Since Launch: | 12.82% |
| Benchmark: | NIFTY 50 TRI |
| Riskometer: | Very High |
| Return Grade: | Average |
| Assets (AUM): | ₹ 280 Cr |
| Turnover: | 36.00% |
| Expense Ratio: | 0.16% |
| Tracking Error: | 1.06% |
#3. Last 10-year return yielded by the index fund
#4. Sector-wise allocation of funds and comparison with Index fund category allocation
#5. Top Portfolio Holdings
| Security Name | Holding (%) |
| Reliance Industries Ltd. | 10.64 |
| HDFC Bank Ltd. | 10.54 |
| Infosys Ltd. | 7.33 |
| HDFC Ltd. | 7.20 |
| ICICI Bank Ltd. | 6.50 |
| Tata Consultancy Services Ltd. | 4.80 |
| Kotak Mahindra Bank Ltd. | 4.10 |
| Hindustan Unilever Ltd. | 3.00 |
| Axis Bank Ltd. | 2.84 |
| ITC Ltd. | 2.82 |
#5. UTI Nifty Index Fund
UTI Nifty Index Fund has a huge AUM size of Rs. 3,292 Crores that depicts investors trust in the fund. The fund invests in Nifty 50 stocks and achieves return equivalent to Nifty 50 index with a low tracking error of 1.51%.
Let’s see the last 3-year performance of the UTI Nifty Index Fund and other important details below –
#1. Last 3-year fund performance
#2. UTI Nifty Index Fund Details
| Fund House: | UTI Mutual Fund |
| Launch Date: | 01-Jan-2013 |
| Return Since Launch: | 12.66% |
| Benchmark: | NIFTY 50 TRI |
| Riskometer: | Very High |
| Return Grade: | Above Average |
| Assets (AUM): | ₹ 3,292 Cr |
| Turnover: | 30.00% |
| Expense Ratio: | 0.10% |
| Tracking Error: | 0.20% |
#3. Last 10-year return yielded by the index fund
#4. Sector-wise allocation of funds and comparison with Index fund category allocation –
#5. Top Portfolio Holdings
| Security Name | Holding (%) |
| Reliance Industries Ltd. | 10.96 |
| HDFC Bank Ltd. | 10.85 |
| Infosys Ltd. | 7.55 |
| Housing Development Finance Corporation Ltd. | 7.41 |
| ICICI Bank Ltd. | 6.70 |
| Tata Consultancy Services Ltd. | 4.94 |
| Kotak Mahindra Bank Ltd. | 4.24 |
| Hindustan Unilever Ltd. | 3.09 |
| Axis Bank Ltd. | 2.92 |
| ITC Ltd. | 2.89 |
#6. Tata Index Nifty Fund
If you aim for medium to long term capital gains, then go with Tata Index Nifty fund as you can get a decent return of 13% to 15% for the investement period around 3 to 5 years.
Let’s see the last 3-year performance of the Tata Nifty Index Fund and other important details below –
#1. Last 3-year fund performance
#2. Tata Index Nifty Fund Details
| Fund House: | Tata Mutual Fund |
| Launch Date: | 01-Jan-2013 |
| Return Since Launch: | 12.62% |
| Benchmark: | NIFTY 50 TRI |
| Riskometer: | Very High |
| Return Grade: | Above Average |
| Assets (AUM): | ₹ 121 Cr |
| Turnover: | 16.47% |
| Expense Ratio: | 0.05% |
| Tracking Error: | 1.51% |
#3. Last 10-year return yielded by the index fund
#4. Sector-wise allocation of funds and comparison with Index fund category allocation
#5. Top Portfolio Holdings
| Security Name | Holding (%) |
| Reliance Industries Ltd. | 10.75 |
| HDFC Bank Ltd. | 10.69 |
| Infosys Ltd. | 7.35 |
| Housing Development Finance Corporation Ltd. | 7.24 |
| ICICI Bank Ltd. | 6.53 |
| Tata Consultancy Services Ltd. | 4.80 |
| Kotak Mahindra Bank Ltd. | 4.16 |
| Hindustan Unilever Ltd. | 3.04 |
| ITC Ltd. | 2.82 |
| Axis Bank Ltd. | 2.81 |
#7. HDFC Index Fund Nifty 50 Plan
You can start with as minimum as Rs. 300 as SIP to start your investing journey with HDFC Index Nifty 50 plan fund.
The fund has outperformed the index fund category since 2018 which shows the consistency of the HDFC Nifty index fund.
Let’s see the last 3-year performance of the HDFC Index Fund Nifty 50 Plan and other important details below –
#1. Last 3-year fund performance
#2. HDFC Index Fund Nifty 50 Plan Details
| Fund House: | HDFC Mutual Fund |
| Launch Date: | 01-Jan-2013 |
| Return Since Launch: | 12.67% |
| Benchmark: | NIFTY 50 TRI |
| Riskometer: | Very High |
| Return Grade: | Above Average |
| Assets (AUM): | ₹ 2,577 Cr |
| Turnover: | 21.43% |
| Expense Ratio: | 0.10% |
| Tracking Error: | 0.36% |
#3. Last 10-year return yielded by the index fund
#4. Sector-wise allocation of funds and comparison with Index fund category allocation
#5. Top Portfolio Holdings
| Security Name | Holding (%) |
| Reliance Industries Ltd. | 10.79 |
| HDFC Bank Ltd. | 10.68 |
| Infosys Ltd. | 7.43 |
| Housing Development Finance Corporation Ltd. | 7.30 |
| ICICI Bank Ltd. | 6.60 |
| Tata Consultancy Services Ltd. | 4.87 |
| Kotak Mahindra Bank Ltd. | 4.17 |
| Hindustan Unilever Ltd. | 3.05 |
| Axis Bank Ltd. | 2.88 |
| ITC Ltd. | 2.85 |
#8. Nippon India Index Nifty
You can check the last 3-year performance of the Nippon India Index Nifty and other important details such as return on investment starting from 3 months up to 10 years.
Let’s also check the sector allocation and top holdings of Nippon India Nifty Index fund below.
#1. Last 3-year fund performance
#2. Nippon India Index Nifty Details
| Fund House: | Nippon India Mutual Fund |
| Launch Date: | 01-Jan-2013 |
| Return Since Launch: | 12.33% |
| Benchmark: | NIFTY 50 TRI |
| Riskometer: | Very High |
| Return Grade: | Above Average |
| Assets (AUM): | ₹ 304 Cr |
| Turnover: | 61.00% |
| Expense Ratio: | 0.15% |
| Tracking Error: | 1.03% |
#3. Last 10-year return yielded by the index fund
#4. Sector-wise allocation of funds and comparison with Index fund category allocation
#5. Top Portfolio Holdings
| Security Name | Holding (%) |
| Reliance Industries Ltd. | 10.71 |
| HDFC Bank Ltd. | 10.60 |
| Infosys Ltd. | 7.37 |
| Housing Development Finance Corporation Ltd. | 7.24 |
| ICICI Bank Ltd. | 6.55 |
| Tata Consultancy Services Ltd. | 4.83 |
| Kotak Mahindra Bank Ltd. | 4.14 |
| Hindustan Unilever Ltd. | 3.02 |
| Axis Bank Ltd. | 2.85 |
| ITC Ltd. | 2.83 |
#9. ICICI Prudential Nifty Index Fund
Below you will find the last 3-year performance of the ICICI Prudential Nifty Index Fund and other important details –
#1. Last 3-year fund performance
#2. ICICI Prudential Nifty Index Fund Details
| Fund House: | ICICI Prudential Mutual Fund |
| Launch Date: | 01-Jan-2013 |
| Return Since Launch: | 12.60% |
| Benchmark: | NIFTY 50 TRI |
| Riskometer: | Very High |
| Return Grade: | Average |
| Assets (AUM): | ₹ 1,375 Cr |
| Turnover: | 49.00% |
| Expense Ratio: | 0.10% |
| Tracking Error: | 0.69% |
#3. Last 10-year return yielded by the index fund
#4. Sector-wise allocation of funds and comparison with Index fund category allocation
#5. Top Portfolio Holdings
| Security Name | Holding (%) |
| Reliance Industries Ltd. | 10.71 |
| HDFC Bank Ltd. | 10.60 |
| Infosys Ltd. | 7.37 |
| Housing Development Finance Corporation Ltd. | 7.24 |
| ICICI Bank Ltd. | 6.55 |
| Tata Consultancy Services Ltd. | 4.83 |
| Kotak Mahindra Bank Ltd. | 4.14 |
| Hindustan Unilever Ltd. | 3.02 |
| Axis Bank Ltd. | 2.85 |
| ITC Ltd. | 2.83 |
#10. SBI Nifty Index Fund
Check out the last 3-year performance of the SBI Nifty Index Fund and other important details below –
#1. Last 3-year fund performance
#2. SBI Nifty Index Fund Details
| Fund House: | SBI Mutual Fund |
| Launch Date: | 01-Jan-2013 |
| Return Since Launch: | 12.07% |
| Benchmark: | NIFTY 50 TRI |
| Riskometer: | Very High |
| Return Grade: | Average |
| Assets (AUM): | ₹ 924 Cr |
| Turnover: | 66.00% |
| Expense Ratio: | 0.09% |
| Tracking Error: | 0.40% |
#3. Last 10-year return yielded by the index fund
#4. Sector-wise allocation of funds and comparison with Index fund category allocation
#5. Top Portfolio Holdings
| Security Name | Holding (%) |
| Reliance Industries Ltd. | 10.51 |
| HDFC Bank Ltd. | 10.40 |
| Infosys Ltd. | 7.24 |
| Housing Development Finance Corporation Ltd. | 7.11 |
| ICICI Bank Ltd. | 6.43 |
| Tata Consultancy Services Ltd. | 4.74 |
| Kotak Mahindra Bank Ltd. | 4.06 |
| Hindustan Unilever Ltd. | 2.97 |
| Tri-Party Repo (TREPS) | 2.89 |
| Axis Bank Ltd. | 2.80 |
Let’s understand how to select mutual funds that are aligned with your investment goal in the section below.
How to Choose Best Index Funds in India 2022
#1. Assets Under Management (AUM)
Assets under management (AUM) of a mutual fund is the overall value of an asset or the capital that a mutual fund holds in the market.
AUM is a success indicator of a given fund house. Bigger AUM means successful fund house.
The value of AUM of a particular fund house also contains the returns that a mutual fund earns.
So you can choose the mutual fund which has the highest AUM at present.
However, you can’ t rely on AUM alone, you should look on the next 2 factors as well before investing in index funds.
#2. Expense Ratio
The expense ratio is what you pay a fund house to manage your money. Expense ratio is the percentage of your assets payable to the AMC as a maintenance fee.
If the fund asset size is small, then the expense ratio can be high. Because the AMC has to manage its expenses from a limited (small) asset base.
Choose the mutual fund having a low expense ratio. The cost is an important factor that turns us towards Index Funds rather than Regular Funds, so low cost would result into better profits.
#3. Tracking Error
Since an index fund is basically a fund that replicates the index such as the Sensex or the Nifty and to which extent the index fund couldn’t track the index is generally called the Tracking Error.
So low tracking error means that the index fund has performed well.
Final Thoughts
Once you have gone through the article you can easily shortlist your favourite index funds. I would prefer to go with Nippon Sensex Index fund if I am investing in Sensex based fund.
And HDFC Index Nifty 50 plan if my preference is a Nifty-based index fund because both are consistent in yielding returns, have a lesser expense ratio and tracking error is also low.
Which are the favorite index funds that you are investing in, please let me know in the comments.