Best Nifty 50 Index Funds in India for July 2025: Bandhan Nifty 50, SBI Nifty, and More Based on 3Y CAGR

Investing in index funds has become an increasingly popular strategy for both novice and seasoned investors due to its simplicity, diversification, and cost-effectiveness. An index fund is a type of mutual fund or exchange-traded fund (ETF) designed to replicate the performance of a specific market index, such as Nifty 50.

By investing in a broad market index, individuals gain exposure to a wide range of companies, reducing the risk associated with picking individual stocks and benefiting from overall market growth over time. In this read, we will explore the best Nifty 50 index funds in India for July 2025

Best Nifty50 Index Funds in India for July 2025

Note: The Nifty 50 Index Funds mentioned above have been selected and sorted based on 3Y CAGR as of June 25, 2025

Overview of the Best Nifty 50 Index Funds in India

1. Bandhan Nifty 50 Index Fund

• 5Y CAGR: 20.58
• NAV: ₹53.75
• Alpha: 2.90
• Tracking Error: 0.06

2. Navi Nifty 50 Index Fund

• NAV: ₹16.30
• Alpha: 2.10
• Tracking Error: 0.02

3. UTI Nifty 50 Index Fund

• 5Y CAGR: 20.57
• NAV: ₹173.97
• Alpha: 2.08
• Tracking Error: 0.02

4. SBI Nifty Index Fund

• 5Y CAGR: 20.51
• NAV: ₹220.61
• Alpha: 2.70
• Tracking Error: 0.01

5. HDFC Nifty 50 Index Fund

• 5Y CAGR: 20.51
• NAV: ₹242.02
• Alpha: 2.06
• Tracking Error: 0.02

Also Read: HDFC vs Franklin Flexi Cap Fund: Comparing Returns Over 30 Years

Factors to Consider Before Investing in Index Funds

1. Investment Goals and Time Horizon

Before investing in index funds, it’s important to define your financial goals and determine your time horizon. Index funds are typically best suited for long-term investors who can withstand short-term market fluctuations.

2. Risk Tolerance

Every investor has a different capacity for handling risk. Index funds, while generally less volatile than individual stocks, still carry market risk.

3. Index Type

There are many types of index funds, each tracking a different part of the market. Broad market index funds, such as those that follow the Nifty 50 or a total stock market index, offer diversification across many sectors and companies.

4. Costs and Fees

One of the key benefits of index funds is their low cost, but fees still vary between providers. The most important fee to watch is the expense ratio, which is the annual fee charged as a percentage of your investment.

5. Tax Efficiency

Index funds tend to be more tax-efficient than actively managed funds due to their low turnover, meaning they buy and sell assets less frequently. This reduces the number of taxable events within the fund.

Conclusion

Index funds offer a practical and reliable investment option for those seeking long-term growth with minimal effort and lower fees. Their ability to provide broad market exposure, combined with the benefits of compounding returns and reduced risk through diversification, makes them an ideal choice for building wealth steadily over time. 

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.