As the Indian stock market continues to evolve and attract investors, Nifty 50 index funds have emerged as one of the most popular investment choices.
Historically, the Nifty 50 index has delivered a strong performance with a compounded annual growth rate (CAGR) of 13.35% over the past 3 years and 16.92% over the last 5 years. This consistent growth reflects the robust performance of India’s top 50 companies. With the Indian economy projected to become the world’s third-largest by 2030, the role of these companies in driving economic expansion is significant.
As we look ahead to 2025, it’s crucial for investors to consider the historical performance of these funds, particularly to know their long-term growth potential.
Let’s dive into the top 10 Nifty 50 index funds for 2025, ranked by their 5-year CAGR performance.
| Name | AUM (₹ Crore) | ↓CAGR 5Y (%) | Expense Ratio (%) | Tracking error (%) |
| Bandhan Nifty 50 Index Fund | 1,644.69 | 16.86 | 0.1 | 0.08 |
| UTI Nifty 50 Index Fund | 20,082.94 | 16.67 | 0.18 | 0.03 |
| ICICI Pru Nifty 50 Index Fund | 11,563.15 | 16.65 | 0.17 | 0.04 |
| Nippon India Index Fund-Nifty 50 Plan | 2,036.21 | 16.61 | 0.07 | 0.06 |
| HDFC Nifty 50 Index Fund | 18,104.74 | 16.59 | 0.2 | 0.03 |
| Tata NIFTY 50 Index Fund | 989.76 | 16.58 | 0.19 | 0.08 |
| DSP NIFTY 50 Index Fund | 642.7 | 16.56 | 0.18 | 0.05 |
| SBI Nifty Index Fund | 8,679.18 | 16.53 | 0.2 | 0.02 |
| Aditya Birla SL Nifty 50 Index Fund | 960.71 | 16.51 | 0.2 | 0.04 |
| Taurus Nifty 50 Index Fund | 4.68 | 16.5 | 0.81 | 0.26 |
Note: The top 10 Nifty 50 index mutual funds listed above are sorted as per the 5-year CAGR as of December 8, 2024.
The Bandhan Nifty 50 Index Fund has a well-diversified sector allocation, with the largest portion, 32.85%, invested in the financial sector, followed by 12.92% in energy and 12.91% in technology, as of October 2024.
Some of the top stock holdings in this fund include HDFC Bank (11.35%), which is a major player in the financial sector, Reliance Industries (8.65%) in the energy sector, and ICICI Bank (7.75%).
The minimum initial investment required is ₹1,000, with the same amount required for any additional investments. For those opting for a Systematic Investment Plan (SIP), the minimum investment is just ₹100.
Key metrics:
The UTI Nifty 50 Index Fund follows a diversified sector allocation strategy, with the largest share, 33.3%, invested in the financial sector. This is followed by 13.77% in technology and 12.51% in energy, as of October 2024.
The top stock holdings of the fund include HDFC Bank (11.34%) in the financial sector, Reliance Industries (8.65%) in energy, and ICICI Bank (7.74%) in the financial sector.
The fund offers a flexible investment structure, requiring a minimum investment of ₹1,000, with the same amount for additional investments. For those looking to invest through a Systematic Investment Plan (SIP), the minimum contribution is ₹500.
Key metrics:
The ICICI Prudential Nifty 50 Index Fund has a well-balanced sector allocation, with 32.85% invested in the financial sector, followed by 12.92% each in the energy and technology sectors.
The top stock holdings in this fund include HDFC Bank (11.33%) in the financial sector, Reliance Industries (8.64%) in energy, and ICICI Bank (7.74%) in the financial sector.
The fund offers a low entry point with a minimum investment of just ₹100, whether for initial or additional investments. The fund also accommodates investors with a minimum SIP (Systematic Investment Plan) investment of ₹100.
Key metrics:
The Nippon India Index Fund-Nifty 50 Plan has a diversified sector allocation, with the largest portion, 33.27%, invested in the financial sector, followed by 13.75% in technology and 12.50% in energy.
The fund’s top stock holdings include HDFC Bank (11.35%) in the financial sector, Reliance Industries (8.65%) in energy, and ICICI Bank (7.75%) in the financial sector.
The fund offers a highly accessible investment structure. The minimum initial investment required is ₹100, with the same amount for additional investments. Investors can also start a Systematic Investment Plan (SIP) with a minimum contribution of ₹100.
Key metrics:
The HDFC Nifty 50 Index Fund is strategically allocated across major sectors, with 32.86% invested in the financial sector, 12.93% in both energy and technology sectors.
The fund’s top stock holdings include HDFC Bank (11.34%) in the financial sector, Reliance Industries (8.64%) in the energy sector, and ICICI Bank (7.74%) in the financial sector.
The fund offers investors a flexible investment structure. The minimum initial investment is ₹100, with the same amount required for additional investments. For those opting for a Systematic Investment Plan (SIP), the minimum contribution is also ₹100.
Key metrics:
The fund holds the same stocks in the same proportions as the Nifty 50 index, ensuring it tracks the index’s performance closely.
The fund is periodically rebalanced to reflect changes in the Nifty 50 index, such as stock additions or deletions.
By investing in Nifty 50 funds, investors automatically gain exposure to the top-performing companies in India’s stock market.
The fund typically distributes dividends received from the companies it holds, though investors can also opt for reinvestment.
Nifty 50 funds aim to minimise tracking error, which is the difference between the fund’s performance and the index it tracks.
Nifty 50 index funds typically have lower management fees compared to actively managed funds due to their passive investment strategy.
These funds provide clear insights into the holdings, as they mirror the publicly listed Nifty 50 index.
Nifty 50 index funds are liquid, meaning investors can easily buy or sell units on any business day without significant price fluctuations.
These funds are suitable for investors looking to hold for the long term, benefiting from the overall growth of the Indian economy.
Investors in Nifty 50 funds are typically eligible for long-term capital gains tax benefits if held for more than one year, which makes them tax-efficient.
Ideal for those who are looking to invest for the long haul and benefit from the compounded growth of India’s top companies.
Those who prefer a hands-off approach and want exposure to a wide range of companies without actively managing their portfolios.
As the Nifty 50 provides diversification across multiple sectors, it’s suitable for individuals who seek lower volatility in their investments.
Beginners looking for an easy and low-cost entry point into the Indian stock market may find Nifty 50 index funds an ideal choice.
Individuals looking for a low-maintenance investment option for retirement planning can use Nifty 50 index funds as a foundation for their portfolios.
Although Nifty 50 funds aim to replicate the index, small discrepancies in performance (tracking error) can arise, which may affect returns.
While diversified, the fund’s performance is still tied to the overall performance of the stock market, so market downturns can still lead to losses.
Some Nifty 50 index funds may charge an exit load if investments are redeemed within a short period (usually within a year).
Larger funds with a higher asset base tend to have better liquidity, ensuring easy buy and sell transactions.
Even though index funds are generally low-cost, comparing the expense ratios among different funds is important to ensure you’re getting the best deal.
Nifty 50 index funds offer a compelling investment opportunity for those looking to gain exposure to India’s top 50 companies with a passive, low-cost, and diversified strategy. However, investors should be mindful of certain risks and considerations before investing. Periods of market volatility can lead to short-term losses. Understanding the potential risks and monitoring the fund’s performance over time is essential for making informed investment decisions. Always consult with a financial advisor to ensure these funds align with your overall investment strategy and risk tolerance.
Ready to watch your savings grow? Try our SIP Calculator today and unlock the potential of disciplined investing. Perfect for planning your financial future. Start now!
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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