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Best Index Funds – List of Top Index Funds to Invest in India (2022)

Updated on :  

08 min read.

Best Index funds are one of the most sought after mutual funds ever since the Coronavirus pandemic has taken over the world. We have covered the following in this article:

What are Best Index Funds?

Index mutual funds are a class of equity funds. These funds are passively managed as the main objective of index funds is to track and emulate the performance of a popular stock market index such as S&P BSE Sensex and NSE Nifty 50. The asset allocation of an index fund would be the same as that of its underlying index. It is for this reason that the returns offered by index funds are comparable with its underlying index.

Best 10 Index Funds in India 2022

The following table shows the best index funds in India, based on the past 10-year returns:

Mutual fund 5 Yr. Returns 3 Yr. Returns Min. Investment Rating

Why Should You Invest in Index Funds?

Index funds are considered one of the most secure equity funds as their portfolio consists of blue-chip stocks. These are the stocks of well-established companies with an excellent track record. This makes index funds less susceptible to market fluctuations and thereby offering much-needed stability. Indian benchmark indices NSE Nifty 50 and S&P BSE Sensex have performed overwhelmingly over the past three decades.

They have fought several challenges such as the recession in 2008, the outbreak of several viruses (Zika, Ebola, SARS, H1N1, and so on), geopolitical tensions (such as Sino-American trade war) and so on. Despite such difficulties, the indices have gained significantly since their inception.

Advantages of Index Funds

Index funds come with a comparatively lower expense ratio as they are passively managed, and the asset allocation would more or less remain the same for an extended period. The asset allocation of an index fund would change only when there is a change in the asset allocation of its underlying asset. Therefore, the fund manager would not trade securities now and then, thereby keeping the expense ratio on the lower side.

The stocks constituting an index fund are generally of well-established companies, and they are not affected much by the market fluctuations. This means the returns provided by the index funds are consistent, and the possibility of losing the entire investment is almost negligible. Index funds are apt for those investors that are ready to bear some risk in exchange for restricted returns.