Best Index Funds in India for June 2025: UTI Nifty Next 50, Motilal Oswal Nifty Midcap 150 and More Based on 5Y CAGR

Investing in index funds has become one of the most popular strategies for both beginner and experienced investors looking for a simple, cost-effective way to participate in the stock market. An index fund is a type of mutual fund that aims to replicate the performance of a specific market index, such as the Nifty 50.

Rather than trying to outperform the market through active stock picking or timing, index funds follow a passive investment strategy by holding all—or a representative sample—of the securities in the index they track. In this read, we will explore the best index funds in India for June 2025.

Best Index Funds in India for June 2025

Note: The Index Funds mentioned above have been selected and sorted based on 5Y CAGR as of June 4, 2025

Overview of the Best Index Funds in India

1. Motilal Oswal Nifty Small Cap 150 Index Fund

• 3Y CAGR: 26.68%
• NAV: ₹38.10
• Alpha: 3.88
• Tracking Error: 0.04

2. DSP Nifty 50 Equal Weight Index Fund

• 3Y CAGR: 19.08%
• NAV: ₹25.41
• Alpha: 1.76
• Tracking Error: 0.05

3. Motilal Oswal Nifty 500 Index Fund

• 3Y CAGR: 17.97%
• NAV: ₹26.22
• Alpha: 2.43
• Tracking Error: 0.07

4. UTI Nifty Next 50 Index Fund

• 3Y CAGR: 20.76%
• NAV: ₹24.53
• Alpha: 2.70
• Tracking Error: 0.10

Also Read: Best Mutual Funds for Lumpsum Investment for June 2025 - SBI PSU, HDFC Infra Fund & More

Factors to Consider Before Investing in Index Funds:

1. Investment Goals: Define your financial objectives—whether it's wealth accumulation, retirement planning, or saving for a specific goal. This helps determine if index funds align with your timeline and risk appetite.
2. Risk Tolerance: Index funds carry market risk as they mirror market performance. Understand how much volatility you can handle, especially during downturns.
3. Expense Ratio: One of the main benefits of index funds is their low cost. Compare the expense ratios of different funds, as even small differences can impact long-term returns.
4. Tracking Error: This measures how closely a fund follows its index. Lower tracking error indicates better performance in mirroring the index.
5. Type of Index Tracked: Not all index funds are the same—some track large-cap indexes, others focus on mid-caps, international markets, or specific sectors. Choose one that aligns with your strategy.

Conclusion

Index funds offer a straightforward, low-cost, and effective way to participate in the stock market with broad diversification and reduced risk. By mirroring the performance of established market indexes, they provide consistent returns over the long term without the complexities and higher fees associated with active management. 

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.

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.