Are you looking for a simple way to invest in the share market without picking individual stocks? For you, Index mutual funds India might be the answer. By investing in the same stocks as market benchmarks like Nifty 50 or Sensex, these funds copy their performance. This makes them great for both new and experienced investors.
What Are Index Mutual Funds?
Index mutual funds in India are investments that follow specific market indices. Unlike active funds, where fund managers choose stocks, these funds comprise the same securities as in the benchmark index and in the same proportion. Index funds do not require active management, are less risky and are most cost-effective.
Top Index Mutual Funds in India for 2025
UTI Nifty 50 Index Fund Direct Growth
- AUM: ₹ 21,356.16 crore
- Short Term (1-Year) Returns: 6.8%
- Expense Ratio: 0.17%
- Minimum Investment: ₹1,000 (lump sum), ₹500 (SIP)
- Long Term (5-Year) Returns: 23.39%
UTI’s fund stands out with its large size and strong long-term performance. The low expense ratio makes it cost-effective for long-term investors.
HDFC Nifty 50 Index Fund Direct Plan
- AUM: ₹17,598 crore
- Short Term (1-Year) Returns: 6.8%
- Expense Ratio: 0.20%
- Minimum Investment: ₹100 (lump sum and SIP)
- Long Term (5-Year) Returns: 24.11%
HDFC’s fund offers easy entry with low minimum investments. Its massive asset base indicates strong investor confidence.
ICICI Prudential Nifty 50 Index Fund Direct Growth
- AUM: ₹11,485 crore
- Short Term (1-Year) Returns: 6.8%
- Expense Ratio: 0.19%
- Minimum Investment: ₹100 (lump sum and SIP)
- Long Term (5-Year) Returns: 23.32%
This fund combines accessibility with strong performance, making it suitable for beginners in the index mutual funds India space.
Nippon India Index – Sensex
- AUM: ₹760.90 crore
- Short Term (1-Year) Returns: 6.3%
- Expense Ratio: 0.48%
- Minimum Investment: ₹1,000
- Long Term (5-Year): 21.84%
This fund provides exposure to India’s oldest stock market index at a reasonable cost.
ICICI Prudential Sensex Fund
- AUM: ₹1,677.88 crore
- Short Term (1-Year) Returns: 6.54%
- Expense Ratio: 0.27%
- Minimum Investment: ₹100
- Long Term (5-Year): 22.05%
The fund’s impressive returns since inception make it stand out among Sensex-tracking options.
Nippon India Index Fund Nifty 50 Direct Growth
- AUM: ₹2,008.59 crore
- Short Term (1-Year) Returns: 6.88%
- Expense Ratio: 0.07% (lowest among major funds)
- Minimum Investment: ₹100
- Long Term (5-Year): 23.88%
If cost-efficiency is your priority, Nippon’s ultra-low expense ratio makes it the most affordable choice in the index mutual funds India market.
Bandhan Nifty 50 Index Fund Direct Growth
- AUM: ₹1,604 crore
- Short Term (1-Year) Returns: 3.79%
- Expense Ratio: 0.10%
- Minimum Investment: ₹1,000
- Long Term (5-Year) Returns: 31.86%
This fund combines competitive returns with a very low expense ratio, making it an excellent value proposition.
Why Choose Index Funds?
- Cost-Effectiveness: With expense ratios as low as 0.07%, these funds cost much less than actively managed funds.
- Simplicity: No need to research individual stocks or time the market.
- Diversification: Instant exposure to 30-50 major companies across sectors.
- Reliable Returns: History shows these funds deliver consistent long-term results.
Taxation of Index Funds
It’s important to know that profits from index mutual funds India are taxable. Short-term gains (holding period less than 12 months) face 20% tax. Long-term gains (beyond 12 months) are taxed at 12.5%, with gains up to ₹1.25 lakh per year exempt from tax.
Conclusion
Whether you are a beginner or a seasoned investor, index mutual funds India offer a straightforward path to market participation. Their low costs, simplicity and reliable returns make them an excellent foundation for any investment portfolio.