Investing in the stock market can be a daunting task, especially for those new to the world of finance. Index funds are gaining popularity among long-term investors because they offer a wide range of stocks at relatively low cost. With so many options available, it can be difficult to decide which index fund to invest in. In this article Best index funds for long term investment Based on the fund’s low expense ratio and significant AUM. Investors can invest in these index funds based on their risk appetite and financial goals.
Also read: 5 Star Rated Crisil Mutual Funds to Invest in 2023
How did you filter the best index funds for these long-term investments?
We considered all direct plans for equity funds. Based on this, there are about 690 odd mutual funds, including index funds and active funds.
We have further filtered all index funds from this list. We were able to acquire about 97 mutual funds.
Funds were further filtered from specific indices such as Nifty 50, Sensex, Nifty Next 50, Midcap 150, Smallcap 250 and Nasdaq 100.
Removed certain indices such as Nifty 100, Midcap 50/100 or Smallcap 50/100, Momentum Index, All Sectors Index, Nifty 100 Quality 30 Index.
From each of these selected index categories, we excluded two mutual funds with low expense ratios.
Filter further if the AUM is at least Rs 100 Crores.
All data sources are from ValueResearch and moneycontrol. Returns calculated as of April 16, 2023.
The 12 best index mutual funds for long-term investing in 2023
#1 – Best Nifty 50 Index Funds to Invest in
The Nifty 50 Index is a well-diversified index of 50 companies that reflects overall market conditions. The Nifty 50 Index is calculated using the float market capitalization method.
Nifty 50 Index Performance
Below are the total annual returns for this index.
Last year – 0.6%
Last 5 years – 12.75%
Last 10 years – 11.9%
Since inception – 11%
top index funds to invest in
This is a listing of two mutual funds in this index with low expense ratios and AUM above Rs 100 crore.
| funds | experience % | assets under management |
|---|---|---|
| Navi Nifty 50 Index Fund | 0.06 | 722 |
| Bandhan Nifty 50 Index Fund | 0.10 | 678 |
Who can invest in these Nifty 50 Index Funds?
The Nifty 50 Index is a stable performer over the medium to long term. To maximize your return, we recommend investing in SIP or multiple lump sums per term. Medium to high risk investors willing to invest for 5 years or more can invest in these funds.
#2 – Best Sensex Index Funds To Invest In
These funds invest in 30 shares that are part of Sensex.
Performance of the Sensex Index
Below are the total annual returns for this index.
Last year – 5.7%
Last 5 years – 11.9%
Last 10 years – 11.97%
TOP SENSEX INDEX FUNDS TO INVEST IN
This is a listing of two mutual funds in this index with low expense ratios and AUM above Rs 100 crore.
| funds | experience % | assets under management |
|---|---|---|
| ICICI Prudential S&P BSE Sensex Index Fund | 0.16 | 896 |
| UTI S&P BSE Sensex Index Fund | 0.20 | 158 |
Who can invest in these Sensex Index Funds?
The Sensex Index Fund invests in 30 underlying stocks and delivers consistent performance over the medium to long term. Some experts say the Nifty index has 50 stocks with more diversification than the Sensex. I don’t think you should invest in both the Nifty50 Index and the Sensex Index Fund, but you can choose either. Again, investing through SIP or in multiple lump sums per term will help maximize your return. If you are a medium to high risk investor willing to invest for more than 5 years, such he can invest in the Sensex fund.
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#3 – Best Nifty Next 50 Index Funds to Invest in
The Nifty Next 50 Index represents the 50 companies in the Nifty 100 minus the Nifty 50 companies.
Performance of the Nifty Next 50 Index
Below are the total annual returns for this index.
Last year – minus 7.3%
Last 5 years – 6.8%
Since inception – 14.7%
Top Nifty Next 50 Index Funds to Invest in
This is a listing of two mutual funds in this index with low expense ratios and AUM above Rs 100 crore.
| funds | experience % | assets under management |
|---|---|---|
| HDFC NIFTY Next 50 Index Fund | 0.30 | 345 |
| ICICI Prudential Nifty Next 50 Index Fund | 0.30 | 2,477 |
Who can invest in these Nifty Next 50 Index Funds?
The Nifty Next 50 Index has been a consistent performer over the medium to long term. However, the party was ruined for several reasons. There have been several New Age companies that have participated in this index and their stock prices have plummeted (Zomato, Nykaa, etc.). Even crashes such as Adani Group stocks (AWL, Adani Green, Adani Transmission) have ruined index performance. Personally, I am against investing in this index. However, if an investor believes that the index will do better in the years to come, they can invest in these funds.
#4 – Best Mid-Cap 150 Index Funds to Invest in
The Nifty Midcap 150 represents the next 150 companies (ranked 101-250) based on Nifty 500 market capitalization.
The index is intended to measure the performance of companies with medium market capitalization.
Nifty Midcap 150 Index Performance
Below are the total annual returns for this index.
Last year – 2.7%
Last 5 years – 12.5%
Since inception – 15.8%
Top Midcap 150 Index Funds to Invest in
This is a listing of two mutual funds in this index with low expense ratios and AUM above Rs 100 crore.
| funds | experience % | assets under management |
|---|---|---|
| ICICI Prudential Nifty Midcap 150 Index Fund | 0.20 | 108 |
| Japan India Nifty Midcap 150 Index Fund | 0.20 | 584 |
Who can invest in these Mid Cap 150 Index Funds?
This mid-cap index includes 150 mid-cap companies. Mid-cap stocks are riskier than large-cap stocks. The Indian stock market has underperformed over the past year and a half, which is reflected in the index’s poor returns over the past five years. If you are a high risk investor and are willing to invest for 8 to 10 years or more, you can invest in these funds.these are High-risk, high-return mutual funds.
#5 – Best Nifty Small Cap 250 Index Fund to Invest in
The Nifty Smallcap 250 represents the remaining 250 companies in the Nifty 500 (companies ranked 251-500).
Performance of the Nifty Small Cap 250 Index
Below are the total annual returns for this index.
Last year – minus 6%
Last 5 years – 8%
Since inception – 14%
Top Nifty Small Cap 250 Index Fund
This is a listing of two mutual funds in this index with low expense ratios and AUM above Rs 100 crore.
| funds | experience % | assets under management |
|---|---|---|
| Japan India Nifty Smallcap 250 Index Fund | 0.30 | 392 |
| Motilal Oswal Nifty Smallcap 250 Index Fund | 0.31 | 315 |
Who can invest in these Nifty Small Cap 250 Index Funds?
The Small Cap Index includes 250 small cap companies. Small-cap stocks are more risky than mid-cap and large-cap stocks. Again, due to the poor performance of the Indian equity market as a whole, this small-cap index may have seen poor returns over the past five years. If you are a high risk investor and are willing to invest from 8 to 10 years he can invest in these Small His Cap Index Funds. These are high risk, high return funds.
Also read: 5 mutual funds with the best returns in the last decade
#6 – Best Nasdaq 100 Index Fund to Invest
of Nasdaq-100 An equity market index composed of 101 shares issued by the 100 largest non-financial companies listed on the Nasdaq Stock Exchange. This is a modified market capitalization weighted index.
Nasdaq 100 index performance
Below are the total annual returns for this index.
Last year – minus 6%
Last 5 years – 14.4%
Last 10 years – 16%
Top NASDAQ 100 Index Funds to Invest in
You can also filter for two funds with high AUM and low expense ratios in this category as well.
| funds | experience % | assets under management |
|---|---|---|
| Motilal Oswar Nasdaq 100 FOF | 0.10 | 3,607 |
| Navi Nasdaq 100 FoF | 0.13 | 517 |
Who can invest in these Nasdaq 100 Index Funds?
Many critics say the Nasdaq 100 Index contains 100 companies that are primarily technology-related. A big negative point is the drop in tech stocks over the past year. However, this could be temporary, and we expect the index to recover and outperform over the next five to ten years. High-risk investors looking to invest over five years and looking for global exposure in a mutual fund portfolio can invest in such index funds.
Note: Investing in mutual funds is subject to market risk, so please read all documents related to the scheme carefully.
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Suresh KP is the founder of Myinvestmentideas. He is his NISM Certified – Investment Advisor and NISM Certified – Research Analyst. He has been analyzing financial markets for the past 20 years.
