Index Funds are mutual funds that invest in a specific index. In terms of portfolios, their primary goal is to replicate a stock market index. An index fund invests in the same stocks and at the same weightage as the underlying index—a few of India's Best Index Funds with the highest AUMs.
This is strictly for informational purposes. This is not a recommendation to consider the highest AUMs before investing. Before investing, please consider your risk tolerance and investment objectives.
Index Funds are intended to replicate the performance of a specific stock index. When I say "imitating," I mean both the index's holdings and the weightage of each stock. Even the best index funds must adhere to this standard.
A Nifty index fund, for example, will invest 10% of its money in Reliance Industries if the Nifty has given RIL 10% of its weightage. Similarly, stock market indices rebalance their portfolios regularly throughout the year. Index funds must follow such changes. Hence, an Index Fund manager is expected to track any weightage or stock list changes.
This blog has composed a list of the Best Index Mutual Funds.
Here is a table defining the top index funds to buy in India-
Index Mutual Funds
Here are a few considerations you must look into before investing your money in index funds-
Index Funds are a type of Passive Mutual Fund. Passive Mutual Funds are those in which the fund manager is not actively involved.
Index Fund managers, as previously stated, attempt to replicate the performance of an index, but here they have no say over which stocks enter and exit the fund or how much of the fund's money is invested in which stock.
Index Fund managers do not seek to outperform the alpha, a stock market jargon for outperforming the benchmark. Instead, the fund manager attempts to imitate it here.
As a result, in most cases, the return is close to or slightly lower than the Index Return due to the fund's charges. Hence, most of the Top Index funds in India will have returns nearly identical to the benchmark index they are tracking.
Below-mentioned is a brief overview of the index funds
UTI Nifty Next 50 Index Fund Direct-Growth is an "Other" Mutual Fund Scheme launched by UTI Mutual Fund and is considered the Best Nifty Index Fund in India.
The scheme seeks to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by the underlying index, subject to tracking error.
Axis Nifty Next 50 Index Fund Direct-Growth is an "Other" Mutual Fund Scheme launched by Axis Mutual Fund and is a Top Nifty 50 Index Fund of India.
The scheme seeks to provide returns before expenses that closely correspond to the total returns of the Nifty 50 Index Fund subject to tracking errors.
You May Want to Know
Indices like the Total Market Index have a portfolio of around 750 stocks. It gives a wide outlook of the stock market. Hence, if you’re investing in a fund that tracks the Nifty Total Market Index, you can access a wide spectrum of stocks with a single investment.
Motilal Oswal S&P BSE Low Volatility Index Fund Direct-Growth is an "Other" Mutual Fund Scheme launched by Motilal Oswal Mutual Fund.
The scheme's investment objective is to provide returns that, before expenses, correspond to the total returns of the securities as represented by the S&P BSE Low Volatility Total Return Index, subject to tracking error.
Nippon India Nifty SmallCap 250 Index Fund Direct-Growth is an "Other" Mutual Fund Scheme launched by Nippon India Mutual Fund.
The scheme seeks to provide investment returns closely corresponding to the total returns of the securities as represented by the Nifty SmallCap 250 Index before expenses, subject to tracking errors.
IDFC Gilt 2028 Index Fund Direct-Growth is an "Other" Mutual Fund Scheme launched by IDFC Mutual Fund.
The scheme seeks to provide investment returns closely corresponding to the total returns of the securities as represented by the CRISIL Gilt 2028 Index before expenses, subject to tracking errors.
This was the list of the Best Index Funds India in 2023. Index Funds are passive Mutual Funds that seek to create wealth for investors by replicating the performance of an index. Because of this, index funds may be less risky than active funds. These funds assist in balancing your portfolio across the risk spectrum.
Even though index funds map a specific index, one should not blindly invest in one of the best index funds.
Instead, research to determine whether these funds are a good fit for your portfolio and how much you should invest in them. You can even determine your returns by using the Groww SIP Calculator. It can help to identify the expected returns for your SIP investments done monthly.