Best Index Funds In July 2025: UTI Nifty 50 Index Fund, ICICI Pru Nifty Next 50 Index Fund and More- Based on 5-Yr CAGR

Investing in index funds has emerged as a popular approach among both new and seasoned investors who want a straightforward and low-cost way to gain exposure to the stock market. An index fund is a mutual fund designed to mirror the performance of a specific market index, like the Nifty 50.

Instead of attempting to beat the market through active stock selection or market timing, index funds use a passive strategy by investing in all or a representative portion of the securities within the index they follow. In this article, we’ll look at some of the top index funds in India to consider in July 2025.

Best Index Funds In July 2025 - Based on 5-Year CAGR

Note: The list of best Index Funds mentioned above has been selected from the AUM of above ₹5,000 and sorted based on 5Y CAGR as of June 30, 2025 

Overview of Best Index Funds In July 2025

1. UTI Nifty Next 50 Index Fund

• 1-Month Returns: 2.34%
• 1-Year Returns: 3.23%
• CAGR: 14.18%
• Expense Ratio: 0.34%
• Assets Under Management (AUM): ₹5,287.6 crore

2. ICICI Pru Nifty Next 50 Index Fund

• 1-Month Returns: 2.33%
• 1-Year Returns: 3.56%
• CAGR: 15.10%
• Expense Ratio: 0.31%
• Assets Under Management (AUM): ₹7,479.3 crore

3. UTI Nifty 50 Index Fund

• 1-Month Returns: 3.67%
• 1-Year Returns: 7.66%
  CAGR: 13.38%
• Expense Ratio: 0.19%
• Assets Under Management (AUM): ₹23,249.4 crore

4. SBI Nifty Index Fund

• 1-Month Returns: 3.67%
• 1-Year Returns: 7.61%
• CAGR: 13.10%
• Expense Ratio: 0.22%
• Assets Under Management (AUM): ₹9,838.8 crore

5. HDFC Nifty 50 Index Fund

• 1-Month Returns: 3.67%
• 1-Year Returns: 7.61%
• CAGR: 13.50%
• Expense Ratio: 0.20%
• Assets Under Management (AUM): ₹20,409.3 crore

Best Index Funds In July 2025 - Based on AUM

Note: The list of best Index Funds mentioned above has been selected from the AUM of above ₹5,000 and sorted based on AUM as of June 30, 2025 

Best Index Funds In July 2025 - Based on 3-Year CAGR

Note: The list of best Index Funds mentioned above has been selected from the AUM of above ₹5,000 and sorted based on 3-Yr CAGR as of June 30, 2025 

Read More: Best Oil and Gas Stocks in July 2025: CPCL, Oil India, MRPL and More - Based on 5-Yr CAGR!

Factors to Keep in Mind Before Investing in Index Funds

Investment Goals

Be clear about your financial targets—whether you’re aiming to build wealth, plan for retirement, or save for a particular purpose. This will help you decide if index funds match your investment horizon and risk profile.

Risk Tolerance

Since index funds track overall market movements, they are subject to market risks. It’s important to know how much fluctuation you’re comfortable with, especially during periods when markets decline.

Expense Ratio

A major advantage of index funds is their low cost. Make sure to compare expense ratios across different options, as even slight variations can affect your returns in the long run.

Tracking Error

This indicates how accurately a fund replicates the index it follows. A lower tracking error means the fund does a better job of matching the index’s performance.

Type of Index Tracked

Index funds aren’t all alike—some focus on large-cap stocks, others on mid-caps, international equities, or specific sectors. Pick one that fits your investment approach and objectives.

Conclusion

Index funds provide a simple, affordable, and efficient way to invest in the stock market with broad diversification and lower risk. By passively replicating established market indexes, they deliver steady returns over time without the complexity and higher costs linked to active fund 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 are subject to market risks, read all scheme-related documents carefully.