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Top Nifty-50 Index Funds to Consider in 2025: A Comprehensive Guide
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Published in Stocks and Investing on Thursday, November 27th 2025 at 1:10 GMT by ThePrint- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
The Top Nifty‑50 Index Funds to Consider in 2025: A Comprehensive Guide
In an era where investors are increasingly seeking low‑cost, diversified exposure to the Indian market, Nifty‑50 index funds have become a cornerstone of many portfolios. The Print’s recent deep‑dive into “Which are the top Nifty‑50 index funds to invest in 2025?” offers a practical, data‑driven overview of the best options available, the criteria that underpin their selection, and the broader market dynamics that make these funds attractive for the coming year.
Why Nifty‑50 Index Funds Matter
The Nifty‑50 is the benchmark index for the National Stock Exchange (NSE), comprising 50 of the largest and most liquid Indian stocks. An index fund that tracks the Nifty‑50 essentially mirrors the performance of these 50 giants, giving investors instant exposure to a diversified slice of the market without the need to pick individual stocks. As the Print’s article emphasizes, index funds have become the “default” for many long‑term investors because they combine:
- Low expense ratios – typically 0.5% or less, far below the 1.5–2% that many actively managed funds charge.
- High liquidity – ensuring that shares can be bought or sold quickly without significant price slippage.
- Transparent tracking – most index funds report their tracking error quarterly, allowing investors to assess how closely the fund follows the index.
The article notes that in 2025, India’s economic fundamentals look strong: robust GDP growth, fiscal discipline, and a projected 12% inflation rate that the RBI is expected to target efficiently. These conditions bode well for the Nifty‑50, making the selection of the right index fund a critical decision.
The Selection Criteria
To determine which index funds are “top” for 2025, the article lists five key metrics:
- Expense Ratio – lower is always better.
- Tracking Error – the deviation between the fund’s returns and the index; a lower error indicates a more faithful replication.
- Fund Size (Assets Under Management) – larger funds typically have better liquidity and lower bid‑ask spreads.
- Net Asset Value (NAV) Stability – funds that have a stable NAV over time tend to manage fund flows more efficiently.
- Re‑balancing Frequency – most index funds re‑balance quarterly, but some re‑balance monthly, which can reduce tracking error at the cost of higher transaction costs.
These criteria are mirrored in the table the article presents, ranking each fund from best to worst based on the weighted score of the above metrics.
The Top 8 Nifty‑50 Index Funds for 2025
Below is a concise summary of the eight funds highlighted by the article, each accompanied by a quick snapshot of its key attributes.
| # | Fund Name | Fund Type | Expense Ratio | Tracking Error | AUM (₹bn) | Liquidity | Notes |
|---|---|---|---|---|---|---|---|
| 1 | HDFC Nifty 50 ETF | ETF | 0.10% | 0.32% | 18,500 | ★★★★★ | One of the oldest Nifty ETFs with high trading volume. |
| 2 | Nippon India Nifty 50 ETF | ETF | 0.14% | 0.28% | 12,300 | ★★★★☆ | Known for consistent performance and a solid custodian. |
| 3 | UTI Nifty 50 Index Fund | Mutual Fund | 0.30% | 0.35% | 9,200 | ★★★★☆ | Lower expense than many ETFs but has similar tracking. |
| 4 | Motilal Oswal Nifty 50 ETF | ETF | 0.15% | 0.27% | 7,800 | ★★★★☆ | High liquidity and low bid‑ask spread. |
| 5 | ICICI Prudential Nifty Next 50 ETF | ETF | 0.12% | 0.33% | 6,500 | ★★★★☆ | Though it tracks the Next‑50, it’s often included due to strong liquidity. |
| 6 | Axis Nifty 50 ETF | ETF | 0.10% | 0.31% | 5,900 | ★★★★☆ | Newer entrant but offers a low expense ratio. |
| 7 | SBI Nifty 50 Index Fund | Mutual Fund | 0.28% | 0.36% | 4,800 | ★★★★☆ | Strong distribution network via SBI. |
| 8 | Mirae Asset Nifty 50 ETF | ETF | 0.13% | 0.29% | 4,200 | ★★★★☆ | Competitive expense ratio and solid asset management. |
All figures are as of the end of Q3 2024 and are rounded for readability.
1. HDFC Nifty 50 ETF – The Market Leader
HDFC’s flagship Nifty ETF is a perennial favorite, primarily because its expense ratio sits at a mere 0.10%. The fund’s tracking error of 0.32% is consistently among the best, and its massive AUM of ₹18.5 trn ensures a razor‑thin bid‑ask spread even during volatile periods. The article notes that the fund’s high trading volume—averaging over 30 m shares per day—makes it ideal for both retail and institutional investors.
2. Nippon India Nifty 50 ETF – A Steady Performer
Nippon India’s ETF stands out for its balanced approach: a slightly higher expense ratio of 0.14% but a lower tracking error of 0.28%. With an AUM of ₹12.3 trn, it offers good liquidity, and its reputation as one of the most well‑regulated funds in India gives investors confidence in its compliance and risk management.
3. UTI Nifty 50 Index Fund – The Mutual‑Fund Alternative
UTI’s mutual‑fund version appeals to investors who prefer mutual funds over ETFs. Although its expense ratio is higher (0.30%), the tracking error of 0.35% remains competitive. The fund’s AUM of ₹9.2 trn ensures that it can handle large inflows without diluting its tracking quality.
4. Motilal Oswal Nifty 50 ETF – Reliability and Liquidity
Motilal Oswal’s ETF is praised for its liquidity. With an expense ratio of 0.15% and a tracking error of 0.27%, it’s a good mid‑tier option for investors looking for a balance between cost and performance. The article notes that the fund’s active management of liquidity ensures tight spreads even during market stress.
5. ICICI Prudential Nifty Next 50 ETF – A Worthwhile Add‑On
While technically tracking the Nifty Next‑50, ICICI’s ETF often finds its way into top lists because of its high liquidity and low expense ratio (0.12%). Its tracking error of 0.33% is within acceptable limits, and it’s a popular choice for those who want to stay close to the Nifty‑50 but are open to a slightly different exposure.
6. Axis Nifty 50 ETF – New but Competent
Axis’s Nifty ETF is a newer entrant, yet it offers a very low expense ratio of 0.10% and a solid tracking error of 0.31%. Its AUM of ₹5.9 trn may be smaller than the giants, but its distribution network and brand recognition give it credibility.
7. SBI Nifty 50 Index Fund – Traditional Distribution Power
SBI’s mutual‑fund version, with an expense ratio of 0.28% and a tracking error of 0.36%, relies on its extensive retail distribution network. Its AUM of ₹4.8 trn indicates that it can handle large customer inflows without sacrificing tracking performance.
8. Mirae Asset Nifty 50 ETF – Competitive Edge
Mirae Asset’s ETF has a 0.13% expense ratio and a tracking error of 0.29%. While its AUM of ₹4.2 trn is smaller than the others, the fund’s competitive expense ratio makes it a solid choice for cost‑conscious investors.
Beyond the Numbers: Risk and Strategy
The article wisely cautions that while index funds offer low costs and diversification, they are not risk‑free. They are subject to market risk, liquidity risk, and the inherent volatility of the underlying 50 stocks. Nonetheless, the consensus among experts, as highlighted in the piece, is that for most long‑term investors, the best strategy is to pair an index fund with a diversified set of fixed‑income instruments or even a global equity exposure via international ETFs.
Follow‑Up Links and Extra Context
The Print piece links to several companion articles that expand on specific aspects of investing in index funds:
- “How to pick the best Nifty‑50 ETF” – provides a step‑by‑step guide on evaluating fund performance, considering bid‑ask spreads, and understanding tax implications.
- “Nifty‑50: What it is and why it matters” – offers a primer on the index’s composition, sector weights, and historical performance.
- “The rise of passive investing in India” – contextualizes the broader trend toward passive strategies and how this shift affects the fund industry’s future.
These additional resources reinforce the main article’s message: that a well‑chosen Nifty‑50 index fund can be a cornerstone of a disciplined, low‑cost investment strategy in 2025 and beyond.
Bottom Line
If you’re looking to invest in a Nifty‑50 index fund in 2025, focus on funds that deliver:
- Low expense ratios (ideally ≤ 0.15%).
- Small tracking error (≤ 0.35%).
- High liquidity (large AUM, high average daily volume).
From the article’s top‑ranked list, HDFC Nifty 50 ETF, Nippon India Nifty 50 ETF, and UTI Nifty 50 Index Fund emerge as the most compelling options. However, the “best” fund ultimately depends on your specific investment goals, risk tolerance, and the size of the investment you plan to make. Armed with the insights from The Print’s comprehensive review, you can make a data‑driven choice that aligns with both your financial objectives and the evolving dynamics of India’s equity market.
Read the Full ThePrint Article at:
[ https://theprint.in/brandit/which-are-the-top-nifty-50-index-fund-to-invest-in-2025/2793055/ ]
