Top Index Funds in India: A Comprehensive Guide

Index funds are funds that invest in an index. Their main objective is to replicate a stock market index in terms of the portfolio. An index fund has the same stocks and in the same weightage as the stocks listed on the chosen index.

So, instead of an investor trying to invest in all the stocks of an index individually, they can simply choose to invest the money in an index fund which will do the job for them. 

(For a detailed explanation about index funds, click here: Index Funds). 

Here are the top index funds in India: 

Note: The list is arranged in the order of high to low 3 year returns. This is not a recommendation.

IDFC Nifty Direct Plan Growth

Time period 1 Month 1 Year  3 Year  Return* 5.04% 57.74% 22.10%

 

ICICI Prudential Sensex Fund

Time period 1 Month 1 Year  3 Year  Return* 4.64% 54.93% 22.07%

 

Nippon India Index Fund Sensex Plan Direct Growth

Time period 1 Month 1 Year  3 Year  Return* 4.70% 55.19% 22.06%

 

HDFC Index Sensex Direct Plan Growth

Time period 1 Month 1 Year  3 Year  Return* 4.65% 55.25% 21.97%

 

UTI Index NIfty Fund 

Time period 1 Month 1 Year  3 Year  Return* 5.06% 58.23% 21.95%

ICICI Prudential Nifty Index Direct Plan Growth

Time period 1 Month 1 Year  3 Year  Return* 5.05% 58.04% 21.89%

Tata Index Sensex Direct

Time period 1 Month 1 Year  3 Year  Return* 4.59% 53.71% 21.85%

Nippon India Nifty Plan

Time period 1 Month 1 Year  3 Year  Return* 5.06% 58.02% 21.79%

 

HDFC Index Fund Nifty 50 Plan Direct Growth

Time period 1 Month 1 Year  3 Year  Return* 5.05% 58.13% 21.79%

Tata Index Nifty Direct

Time period 1 Month 1 Year  3 Year  Return* 5.05% 57.63% 21.78%

*as on October 19, 2021. 

Note: 

The above list of best index funds India consists of funds that have returned the most in 3 years. This is not an advice or a recommendation that you should invest in only these funds. Please conduct your own research.

How to compare Index funds?

As you can observe from the funds above, the returns offered by index funds trying to replicate the same index (like Nifty 50 for example) do not vary highly – two funds trying to replicate Sensex (for example) would usually give almost similar returns as they are tracking the same index. 

The funds can instead be benchmarked to the returns that the indices are offering (the index which the fund is trying to replicate). 

One of the primary differences in these funds could be that of expense ratio and other costs attached to the fund by the AMC – these costs are what usually account for the minute differences in different funds trying to replicate the same index. 

Further, historical data can give insights such as whether the fund has been successful in aligning its portfolio to the benchmark index and if there were any repeated and reported discrepancies.

Happy Investing! 

Disclaimer: The content presented here is only for informational and educational purposes. It is in no way advice on what to buy or sell. Investors are advised to make investment decisions after in depth research and in alignment with their personal financial goals. 

To read the RA disclaimer, please click here.