Best Nifty 50 Index Fund to Invest in 2024

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Nifty 50 Index mutual funds have a portfolio that matches the NIFTY 50 index of the market. In other words, the returns from these mutual funds match the benchmark returns. Also, nifty 50 index funds have low portfolio turnover, broad market exposure, and low expense ratio. Furthermore, the objective of Nifty 50 index funds is to replicate the portfolio of the benchmark, and hence these are also known as passive funds.

5 Best Nifty 50 Index Fund to Invest in 2024

The following table lists the top Nifty 50 Index Funds:

Fund Name	3 Year CAGR	AUM in Cr
UTI Nifty Index Fund	18.7%	Rs. 12596.829
HDFC Index Nifty 50 Fund	18.5%	Rs. 9828.796
IDBI Nifty Index Fund	20.3%	Rs. 207.732
Tata Index Fund Nifty	18.2%	Rs. 495.450
Nippon India Index Fund Nifty Plan	17.9%	Rs. 1030.353

Recommended Read: How to Invest in Nifty 50?

1. UTI Nifty Index Fund

UTI Nifty Index Fund is an open-ended mutual fund scheme. Therefore. this fund replicates and tracks the Nifty 50 Index in the same proportion as they exist in the Nifty 50 Index. Also, the scheme does not opt for exposure in any other active sector or stock that is different from the index. Moreover, the composition of the index comprises the largest companies across different sectors.

Investment Objective: The investment objective of the fund is to invest in stocks of companies comprising the Nifty 50 Index. Also, it endeavours to achieve a return equivalent to the Nifty 50 Index by ‘passive’ investment. However, there can be no assurance or guarantee that the investment objective of the scheme will be achieved.

Fund details

Expense Ratio: 0.41
Launched: Mar 06, 2000
ISIN: INF789F01JN2
Benchmark: Nifty 50 TR INR
SIP Minimum: Rs. 1000
Lumpsum Min: Rs. 5000
Risk: Very High Risk

Should You Invest in UTI Nifty Index Fund?

The UTI Nifty Index Fund is suitable for investors with an investment horizon of a minimum of 5 years. Hence, an investor who is looking for market exposure in the equity asset class at a relatively cheaper cost should consider investing in this scheme. Also, the fund aims to achieve its objective by investing in stocks of companies comprising the Nifty 50 Index by adopting the passive investment strategy. Furthermore, the fund provides capital appreciation and wealth creation over the long term.

2. HDFC Index Nifty 50 Fund

HDFC Index Nifty 50 Fund is an open-ended index mutual fund scheme. This index mutual fund scheme replicates the Nifty 50 Index. It replicates by investing in the stocks of companies in the same proportion that is listed under the Nifty 50 Index. Also, this fund is not biassed towards any specific sector or industry that’s different from the chosen index. Furthermore, the index’s composition comprises companies across different sectors, market capitalization, and growth potential.

Investment Objective

The investment objective of the Scheme is to generate returns that are also in line with the performance of the NIFTY 50 Index, subject to tracking errors. However, there is no assurance that the investment objective of the scheme will be realised.

Fund details

Expense Ratio: 0.4
Launched: Jul 17, 2002
ISIN: INF179K01KZ8
Benchmark: Nifty 50 TR INR
SIP Minimum: Rs. 1000
Lumpsum Min: Rs. 5000
Risk: Very High Risk

Should You Invest in HDFC Index Nifty 50 Fund?

HDFC Index Nifty 50 Fund is suitable for a long-term investment duration of a minimum of 5 years. Therefore, an investor who is looking for market exposure in the equity asset class at a relatively cheaper cost can consider investing in the scheme. Also, the fund aims to achieve its objective by investing in stocks of companies comprising the Nifty 50 Index by adopting a passive investment strategy. Furthermore, the fund provides inflation-beating growth over the long term.

3. IDBI Nifty Index Fund

IDBI Nifty Index Fund is an open-ended index mutual fund scheme that replicates the Nifty 50 Index. It replicates by investing in the stocks of companies in the similar proportion that is listed under the Nifty 50 Index. Also, this fund does not focus on any other sector or industry that is different from the chosen index. Furthermore, the index’s composition comprises top companies across different sectors and market capitalization.

Investment Objective

The investment objective of the Scheme is to generate returns that are in line with the performance of the NIFTY 50 Index, subject to tracking errors. Also, the scheme may invest in derivatives instruments such as Futures and Options linked to stocks comprising the Index or linked to the Nifty 50 Index. However, there is no assurance that the investment objective of the scheme will be realised.

Fund details

Expense Ratio: 0.9
Launched: Jun 25, 2010
ISIN: INF397L01091
Benchmark: Nifty 50 TR INR
SIP Minimum: Rs. 1000
Lumpsum Min: Rs. 5000
Risk: Very High Risk

Should You Invest in IDBI Nifty Index Fund?

IDBI Nifty Index Fund is suitable for a long-term investment duration of a minimum of 5 years. Therefore, any investor who is looking for market exposure in the equity asset class at a relatively cheaper cost can consider investing in the scheme. Also, the fund aims to achieve its objective by investing in stocks and derivatives of companies comprising the Nifty 50 Index by adopting a passive investment strategy. Furthermore, the fund aims to provide capital appreciation and wealth creation in the long term.

4. Tata Index Fund Nifty

Tata Index Fund Nifty is an open-ended mutual fund scheme reflecting the Nifty 50 Index. Therefore, this fund replicates and tracks the Nifty 50 Index in the same proportion as they exist in the Nifty 50 Index. Also, this fund does not opt for any other active sector or stock that’s different from the chosen index. Furthermore, the index’s composition comprises the largest companies across different sectors, market capitalization, and growth potential.

Investment Objective

The investment objective of the scheme is to reflect and also mirror the market returns with a minimum tracking error. However, this scheme does not assure or guarantee any returns.

Fund details

Expense Ratio: 0.52
Launched: Feb 25, 2003
ISIN: INF277K01741
Benchmark: Nifty 50 TR INR
SIP Minimum: Rs. 1000
Lumpsum Min: Rs. 5000
Risk: Very High Risk

Should You Invest in Tata Index Fund Nifty?

Tata Index Fund Nifty is suitable for a long-term investment duration of a minimum of 5 years. Therefore, an investor who prefers to have market exposure in the equity asset class at a relatively cheaper cost can consider investing in the scheme. Also, the objective of the fund is to invest in stocks of companies comprising the Nifty 50 Index by adopting a passive investment strategy. Furthermore, the fund aims to deliver capital appreciation and wealth creation in the long term.

5. Nippon India Index Fund Nifty Plan

Nippon India Index Fund Nifty Plan is an open-ended index mutual fund scheme that mirrors the Nifty 50 Index. Thus, the objective of the fund is to replicate and track the Nifty 50 Index in the same proportion as they exist in the chosen Index. Also, this fund does not opt for any other active sector or stock that’s different from that particular index. Furthermore, the composition of the index comprises the largest companies across different sectors and market capitalization.

Investment Objective

The primary investment objective of the scheme is to replicate the composition of the Nifty 50, also with a view to generating returns that are commensurate with the performance of the Nifty 50, subject to tracking errors. However, this scheme does not assure or guarantee any returns.

Fund details

Expense Ratio: 0.59
Launched: Sep 28, 2010
ISIN: INF204K01IE3
Benchmark: Nifty 50 TR INR
SIP Minimum: Rs. 1000
Lumpsum Min: Rs. 5000
Risk: Very High Risk

Should You Invest in Nippon India Index Fund Nifty Plan?

Nippon India Index Fund Nifty Plan is suitable for a long-term investment duration of a minimum of 5 years. Therefore, an investor who prefers to have market exposure in the equity asset class at a relatively cheaper cost can consider investing in the scheme. Also, the investment objective of the fund is to invest in stocks of companies comprising the Nifty 50 Index by adopting a passive investment strategy. Furthermore, the fund aims to deliver inflation-beating returns in the long term.

Key Features of Nifty 50 Index Funds

The following are the key features of Nifty 50 Index Funds:

Passive Investment: Nifty 50 Index Funds track the Nifty 50 index to replicate its performance. This approach limits the role of fund managers, who base investment decisions on the underlying index’s composition and performance.
Diversification: Nifty 50 Index Funds invest in the top 50 companies trading on the National Stock Exchange of India (NSE). This diverse selection spans various sectors, offering investors broad exposure and mitigating risks associated with individual stock investments. This diversification diminishes the impact of poor performance from a single company on the overall portfolio.
Low Expense Ratio: Since Nifty 50 Index Funds are passive investments, they typically incur lower costs. Due to the lower management fees, the returns are potentially better for investors.
Transparency: The Nifty 50 index’s composition is an advantage, as it is publicly available. This accessibility allows investors to easily monitor the performance of the underlying companies, aiding informed decision-making.

Who Should Invest in Nifty 50 Index Funds?

Nifty 50 Index Funds offer diverse benefits and suit various investor profiles. For beginners, these funds serve as a gateway to stock market investments by providing exposure to a varied portfolio of blue-chip companies. Long-term investors, with horizons spanning five years or more, can invest in them for their financial goals, such as child’s education, retirement, etc. Nifty 50 index funds are suitable for investors seeking passive investment options.

It is advisable for investors to align their investment objectives, risk tolerance, and time horizon before investing in Nifty 50 index funds.

Evaluating the Nifty 50 Index Fund

To pick the right Nifty 50 Index Fund, you must consider the following parameters:

Asset Under Management (AUM): Funds with extremely large AUM can face liquidity issues. Thus, too big or too small funds in terms of AUM must be avoided.
Expense Ratio: Lower expense ratios translate to higher returns for investors. Thus, it’s wise to pick funds with a lower expense ratio.
Risk and Volatility: Since Nifty 50 index funds invest across 50 large-cap companies, they are still risky. Thus, ensure you are comfortable with the associated risks before investing.
Exit Load: Before investment, check the fund’s exit load. Exit loads can affect returns if you redeem investment before the exit load tenure.

Taxation of Nifty 50 Index Funds

Capital gains taxation of Nifty 50 Index Funds is similar to equity mutual funds. Capital gains are categorized as short-term capital gains (STCG) and long-term capital gains (LTCG).

For a holding period, of less than one year, gains from Nifty 50 Index Funds are treated as STCG. STCG is taxable at 15%.

On the other hand, if the holding period is over a year attract LTCG tax. LTCG above INR 1,00,000 are taxable at 10%.

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