Investing in index funds has become a favoured strategy for both beginners and experienced investors seeking a simple and cost-effective way to participate in the stock market. These mutual funds are structured to replicate the performance of a specific market index, such as the Nifty 50.
Rather than relying on active stock picking or market timing, index funds follow a passive investment approach by holding all or a representative set of the securities in the index they track. In this article, we’ll explore some of the leading index funds in India in August 2025.
| Name | AUM (₹ Cr) | CAGR 3Y (%) | CAGR 5Y (%) |
| UTI Nifty Next 50 Index Fund | 5,287.60 | 18.61 | 20.90 |
| ICICI Pru Nifty Next 50 Index Fund | 7,799.26 | 18.46 | 20.78 |
| UTI Nifty 50 Index Fund | 24,115.50 | 14.45 | 18.06 |
| HDFC Nifty 50 Index Fund | 20,409.32 | 14.41 | 18.01 |
| SBI Nifty Index Fund | 10,166.67 | 14.43 | 18.00 |
Note: The list of best Index Funds in August mentioned above has been selected from the AUM of above ₹5,000 and sorted based on 5Y CAGR as of July 29, 2025
| Name | AUM (₹ Cr) | CAGR 3Y (%) | CAGR 5Y (%) |
| UTI Nifty200 Momentum 30 Index Fund | 8,542.91 | 20.61 | – |
| UTI Nifty Next 50 Index Fund | 5,287.60 | 18.61 | 20.90 |
| ICICI Pru Nifty Next 50 Index Fund | 7,799.26 | 18.46 | 20.78 |
| UTI Nifty Next 50 Index Fund | 24,115.50 | 14.45 | 18.06 |
| SBI Nifty Index Fund | 10,166.67 | 14.43 | 18.00 |
Note: The list of best Index Funds in August mentioned above has been selected from the AUM of above ₹5,000 and sorted based on 3-Yr CAGR as of July 29, 2025
| Name | AUM (₹ Cr) | CAGR 3Y (%) | CAGR 5Y (%) |
| UTI Nifty Next 50 Index Fund | 24,115.50 | 14.45 | 18.06 |
| HDFC Nifty 50 Index Fund | 20,409.32 | 14.41 | 18.01 |
| ICICI Pru Nifty 50 Index Fund | 14,089.53 | 14.40 | 17.99 |
| SBI Nifty Index Fund | 10,166.67 | 14.43 | 18.00 |
| HDFC BSE Sensex Index Fund | 8,645.13 | 13.60 | 17.12 |
Note: The list of best Index Funds in August mentioned above has been selected from the AUM of above ₹5,000 and sorted based on AUM as of July 29, 2025
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Start by identifying your financial goals, whether it's long-term wealth creation, retirement planning, or saving for a specific milestone. This clarity will help you assess if index funds align with your time horizon and risk appetite.
Index funds mirror the performance of broader markets, making them vulnerable to market volatility. It's crucial to evaluate how much risk you can tolerate, especially during market downturns.
One of the biggest advantages of index funds is their low cost. However, expense ratios can vary between funds. Even small differences can compound over time and impact overall returns.
Tracking error measures how closely a fund follows the index it is designed to replicate. A fund with a lower tracking error is more efficient in reflecting the index's performance.
Not all index funds track the same indices. Some follow large-cap benchmarks, while others target mid-caps, international markets, or specific sectors. Select a fund that matches your investment strategy and goals.
Index funds offer a low-cost, straightforward way to gain exposure to the stock market. By passively tracking market indices, they provide broad diversification and consistent returns, making them a solid choice for long-term investors seeking simplicity and reduced management costs.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Jul 29, 2025, 1:06 PM IST
Kusum Kumari
Kusum Kumari is a Content Writer with 4 years of experience in simplifying financial market concepts. Currently crafting insightful content at Angel One, She specialise in breaking down complex topics into easy-to-understand pieces, blending expertise in market fundamentals and technical analysis.
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