Best Nifty 50 Index Mutual Funds In India in September 2024- 5-year CAGR Basis

In 2023, the Nifty 50 index saw a 19.42% increase in returns compared to the previous year. Since 2016, the Nifty 50 has shown positive annual returns each year. Nifty 50 index is a key indicator of the Indian stock market, reflecting the performance of the 50 largest companies listed on the National Stock Exchange (NSE). Over time, the Nifty 50 has become the most popular benchmark for trading products in the Indian stock market. In this article, know the best nifty 50 index mutual fund in India in September based on 5-year CAGR.

What Is a Nifty 50 Index Fund?

Nifty 50 Index Funds are investment funds that try to mimic the performance of the Nifty 50 index, which includes 50 major, actively traded stocks on the NSE. These funds invest in the same stocks and in the same proportions as the Nifty 50, offering investors a simple and cost-effective way to invest without having to select individual stocks.

Best Nifty 50 Index Mutual Funds in India in September 2024 – 5-year CAGR Basis

Note: The nifty 50 index mutual fund list has been sorted based on 5-year CAGR, and as of September 03, 2024

Overview Of Best 5 Nifty 50 Index Mutual Funds

1. Bandhan Nifty 50 Index Fund

The Bandhan Nifty 50 Index Fund – Direct Plan-Growth is an index fund under the category of Index Funds/ETFs managed by IDFC Mutual Fund. As of September 2, 2024, the fund’s Net Asset Value (NAV) is ₹55.5325, reflecting a 0.17% increase. It manages assets worth ₹1,443.55 crore, which constitutes 0.56% of the total investment in this category. The fund’s expense ratio is 0.1%, which is lower than the category average of 0.26%, making it a cost-effective option for investors looking to invest in a Nifty 50 Index Fund. The minimum initial investment is ₹1,000, and subsequent investments also start at ₹1,000. For Systematic Investment Plans (SIPs), the minimum investment amount is ₹100.

2. UTI Nifty 50 Index Fund

The UTI Nifty 50 Index Fund – Growth is categorised under Index Funds/ETFs and is managed by UTI Mutual Fund. As of September 2, 2024, the fund’s Net Asset Value (NAV) is ₹172.2912, showing a 0.17% increase. CRISIL has rated the fund as having above-average performance compared to its peers. It has a substantial fund size of ₹19,356.78 crore, accounting for 1.88% of the total investment in its category. The expense ratio of this fund is 0.25%, which is notably lower than the category average of 0.48%. The minimum initial investment required is ₹5,000, with subsequent investments also starting at ₹1,000. For SIPs, the minimum investment amount is ₹500.

3. ICICI Prudential Nifty 50 Index Fund

The ICICI Prudential Nifty 50 Index Fund—Growth is an Index Fund/ETF managed by ICICI Prudential Mutual Fund. As of September 2, 2024, the fund’s Net Asset Value (NAV) stands at ₹252.5009, reflecting a 0.17% increase. It manages assets worth ₹11,115.37 crore, which makes up 1.08% of the total investments in its category. The fund has an expense ratio of 0.35%, lower than the category average of 0.48%. It requires a minimum investment of ₹100 for both SIP and lumpsum.

4. Nippon India Index Fund

The Nippon India Index Fund – Nifty 50 Plan – Growth is classified under Index Funds/ETFs and is managed by Nippon India Mutual Fund. As of September 2, 2024, the fund’s Net Asset Value (NAV) is ₹42.5987, showing a 0.16% increase. CRISIL has ranked the fund as having average performance compared to its peers. The fund has a total asset size of ₹1,862.8 crore, representing 0.18% of the total investment in its category. The expense ratio for this fund is 0.56%, which is slightly higher than the category average of 0.48%. Investors can start a SIP with a minimum contribution of ₹100. The minimum withdrawal amount from the fund is also set at ₹100. If units are redeemed within 7 days, an exit load of 0.25% will be applied.

5. Tata Nifty 50 Index Fund

The Tata Nifty 50 Index Fund – Regular Plan, managed by Tata Mutual Fund, is classified under Index Funds/ETFs. As of September 2, 2024, the fund’s Net Asset Value (NAV) is ₹156.3968, reflecting a 0.17% increase. According to CRISIL, the fund has below-average performance compared to its peers. It has a fund size of ₹859.43 crore, constituting 0.08% of the total investment in its category. The fund’s expense ratio is 0.52%, slightly above the category average of 0.48%. The minimum initial investment is ₹5,000 for a lump sum payment, while a SIP requires a minimum of ₹150. Additional investments must be at least ₹1,000.

Advantages of Investing in Nifty 50 Index Funds

• No Manager Bias: The fund aims to replicate the index, avoiding personal bias in-stock selection.
• Cost-Effective: These funds are cheaper to manage than actively managed funds because they don’t require extensive research or frequent trading.
• Diversified Portfolio: They provide a broad investment across many sectors, which can help spread out risk.

Factors to Consider When Investing in Nifty 50 Index Funds

• Performance History: Check how the fund has performed over time compared to the Nifty 50 index.
• Return Potential: Returns may differ slightly from the index due to tracking errors and fees.
• Fund Management: Although the fund is passively managed, the fund managers’ experience can affect tracking accuracy.

Taxation on Nifty 50 Mutual Funds

1. Equity Index Funds
   • Short-Term Capital Gains (STCG) on investments held for less than 12 months are taxed at 20%.
   • Long-Term Capital Gains (LTCG) on investments held for over 12 months are taxed at 12.5%. Gains up to ₹1 lakh are tax-free. Indexation benefits have been removed.

2. Debt Index Funds
   • Short-Term Capital Gains (STCG) on investments held for less than 36 months are taxed according to your income tax slab.
   • Long-Term Capital Gains (LTCG) on investments held over 36 months are taxed as STCG at your income tax slab rate for investments made after April 1, 2023. Investments before this date are taxed at 20% with indexation benefits.

Funds that do not focus solely on equity or debt will now be classified as long-term investments after 24 months, with a revised LTCG rate of 12.5%.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.