Investing in index funds is a popular strategy for long-term wealth creation. Compared to picking individual stocks based on performance, index funds simplify your approach as they track a broad market index. One of the best advantages of investing in index funds is their ability to provide diversified exposure to a wide range of industries. This further minimizes risks associated with investing in single stocks.
In this article, we will cover top index funds.
Top Index Funds Investors Should Choose
Based on past returns, we have shortlisted the top five index funds. These funds replicate the performance of a specific index, ensuring lower expense ratios, diversification, and consistent returns over time. You should know this when you plan to invest in MF.
1. LIC Nifty Next 50 Index Fund Direct – Growth
The LIC Nifty Next 50 Index Direct-Growth Fund corresponds to the Nifty Next 50 Index, offering similar returns. Managed by Sumit Bhatnagar, who holds an MBA in Investment Management from the University of Toronto and is also a CFA (USA), the fund has a diverse portfolio including sectors like defense, financial services, and consumer goods.
An overview:
- NAV: INR 57.7303
- Fund Size (AUM): INR 90.25 crore
- Expense Ratio: 0.32%
- 1-Year Return: 60.67%
- 3-Year Return: 22.93%
- 5-Year Return: 22.08%
2. ICICI Prudential Nifty Next 50 Index Fund Direct – Growth
Launched by ICICI Prudential Mutual Fund, this mutual fund replicates the performance of the Nifty Next 50 Index. It is managed by a team consisting of Kayzad Eghlim, Nishit Patel, Priya Sridhar, and Ajay Kumar Solanki. This index fund provides exposure to various leading companies like Trent, Bharat Electronics, and Hindustan Aeronautics.
An overview:
- NAV: INR 65.8900
- Fund Size (AUM): INR 5,844.95 crore
- Expense Ratio: 0.30%
- 1-Year Return: 61.03%
- 3-Year Return: 22.88%
- 5-Year Return: 22.10%
3. Bandhan Nifty 50 Index Fund Direct – Growth
Launched in January 2013, the Bandhan Nifty 50 Index Direct Growth Fund replicates the popular Nifty 50 Index. It is managed by Nemish Sheth and offers broad exposure to top blue-chip companies across various sectors. Its minimal expense ratio and high exposure to large-cap companies ensure a stable performance.
An overview:
- NAV: INR 53.8035
- Fund Size (AUM): INR 1,348.45 crore
- Expense Ratio: 0.10%
- 1-Year Return: 20.60%
- 3-Year Return: 16.77%
- 5-Year Return: 17.76%
4. ICICI Prudential Nifty 50 Index Fund Direct – Growth
This fund from ICICI Prudential mirrors the performance of the Nifty 50 Index. It is managed by an experienced team of fund managers and provides exposure to some of the top blue-chip companies in different sectors. This index fund has substantial exposure to sectors like financial services, energy, and technology.
An overview:
- NAV: INR 254.3948
- Fund Size (AUM): ₹9,800.42 crore
- Expense Ratio: 0.17%
- 1-Year Return: 19.78%
- 3-Year Return: 16.15%
- 5-Year Return: 17.57%
5. HDFC Index Fund – Nifty 50 Plan Direct – Growth
The Nifty 50 Plan Direct Index Fund from HDFC replicates the Nifty 50 Index. It is managed by Arun Agarwal and Nirman Morakhia, providing exposure to leading blue-chip companies across various sectors like financial services, energy, and technology.
An overview:
- NAV: INR 235.3275
- Fund Size (AUM): INR 16,592.30 crore
- Expense Ratio: 0.20%
- 1-Year Return: 20.52%
- 3-Year Return: 16.29%
- 5-Year Return: 17.47%
Conclusion
If you’re someone seeking consistent growth without putting in much effort to research the best-performing stocks, investing in an index fund can fetch you reasonable returns. This is one of the easiest ways to capitalize on the market growth and build wealth over the long term with minimal effort.
