Best Index Funds in December 2025: ICICI Pru, LIC MF, UTI, and More Based on 10-Year CAGR

Index funds have become popular among both beginners and experienced investors because they offer a simple and low-cost way to invest in the stock market. These funds are created to follow the performance of a benchmark index like the Nifty 50.

Instead of picking stocks or trying to time the market, index funds use a passive approach by holding all or most of the stocks that make up the index. In this article, we look at some of the best-performing index funds in India as of December 2025, based on their 10-yr CAGR.

Best Index Funds In December 2025 - Based on 10-Year CAGR

Note: The list of bestIndex Funds in December 202 are sorted based on 10Y CAGR as of November 29, 2025 

Key Points to Remember Before Investing in Index Funds

Define Your Financial Goals

Start by knowing what you want to achieve, whether it's long-term wealth building, retirement planning, or saving for a future expense. Clear goals help you decide if index funds suit your needs and investment duration.

Know Your Risk Capacity

Index funds move up and down with the overall market. Make sure you understand how much market fluctuation you can handle, especially during phases when prices fall.

Review the Expense Ratio

One of the biggest advantages of index funds is their low cost. However, expense ratios vary between funds. Even small differences can impact your final returns over many years. 

Check the Tracking Error

Tracking error tells you how closely a fund follows the performance of its benchmark index. A lower tracking error means the fund is doing a better job of matching the index.

Choose the Right Index

Not all index funds track the same index. Some follow large-cap stocks, others focus on mid-caps, global markets, or specific sectors. Pick the one that fits your investment plan and goals.

Also Read, Angel One Launches India’s First Smart Beta Nifty Total Market MQ50 ETF and Index Fund!

Conclusion

Index funds are a simple and low-cost way to invest in the stock market. By following market indices, they offer diversification and stable long-term growth. This makes them a great choice for investors who prefer an easy, hands-off approach.

You can begin your investment journey with newer index funds like the Angel One Nifty 50.

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.