Which are the best and worst index funds of India in Mar-2024?
This article gives an easy to use Excel list of Index Funds in India for you to know which ones to avoid and which ones can be considered for investing.
Which are the best and worst index funds of India in Mar-2024?
Posted on 01 Mar 2024
Author: Sayan Sircar
Tags: 
Mutual Funds
12 mins read
Mutual Funds
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This article gives an easy to use Excel list of Index Funds in India for you to know which ones to avoid and which ones can be considered for investing.
This article is a part of our detailed article series on the concept of index funds in India. Ensure you have read the other parts here:
-
What are the best index funds for new investors in India?
This article shows the steps that a new index fund investor can follow to shortlist an index fund for investing
-
Are index funds less risky than active funds?
Understanding the risk of every asset class in our portfolio is essential. This article talks about the risk in index funds.
-
Which index funds to invest in and why?
What are index funds, why invest in them and how to choose one?
📚 Topics covered:
- What is an Index Fund?
- What are Index Fund screening metrics?
- How to interpret the data in the tables?
- Funds and benchmarks covered in this article
- Index funds tracking the Sensex TRI
- Fund returns
- Tracking difference (alpha over benchmark)
- Tracking error
What is an Index Fund?
An index fund invests in the same stocks and proportion as a stock market index like Nifty 50 or Sensex. This is called passive investment, where returns are similar to the index, and there is no objective to get better returns than the fund benchmark
We have covered the concept of index funds in detail here: Which index funds to invest in and why?.
This article allows you to see which Index funds currently available in India are good for investing and those which could be avoided. The list of funds below is not exhaustive and only has those funds currently offered by at least two AMCs. If there is a only one fund to track a particular index, it will likely not show up in the list.
Warning and disclaimer: The point of this article is not to tell you which is the BEST Index fund to invest. Instead, it will show you which are the avoidable ones. For this distinction, we have some metrics that we will use to sift through the fund list. The raw data is sourced from the AMFI and NSE websites and are not guaranteed to be complete, timely or accurate. Users are expected to perform their own due diligence before entering, not entering or exiting these funds.
What are Index Fund screening metrics?
Benchmark returns
Each fund is a passively managed fund that tracks a particular benchmark like the Nifty 50 (very popular), SENSEX or physical gold price. There are almost 400+ Index funds in India today tracking more than 80 different benchmarks. The tables show the last 1-year, 2-year, 3-year, 4-year and 5-year benchmark returns.
Fund returns are NAV based
Unlike ETFs, index funds can be entered and exited only at end-of-day NAV. We use NAV data from AMFI to calculate the trailing 1-year, 2-year, 3-year, 4-year and 5-year returns.
Tracking error and tracking difference
Image ©: Vanguard - https://www.ch.vanguard/en/professional/events-education/etfs/management
An index fund closely tries to track its benchmark index but does not due to practical considerations including liquidity of the underlying stocks, trading costs for the AMC and the requirement to hold some cash in the portfolio to manage redemptions. The concept of Tracking difference (we can also call it Alpha) is
Tracking difference = Fund return - Benchmark return
The ideal tracking difference is zero. The next best value is a small negative number. Large negative values or some positive values are both matters of concern and avoidable.
In the tables we show both price-based and NAV based tracking differences.
Tracking error = standard deviation of Tracking difference
By definition this is an always positive number and shows you how much the Tracking difference varies around it’s average value. Most AMCs declare tracking errors of their ETFs and index funds. The ideal tracking error is zero and the next best value is a very small number.
These terms like average and standard deviation are explained in here: Which are the common statistical terms used in Investing?
The ration of Tracking Difference to Tracking Error is called Information Ratio.
Related:
Why SEBI wants mutual fund investors to learn about information ratio?
How to interpret the data in the tables?
The data in the tables is for the last 60 months of trading data for the fund and the benchmarks. Please note the month name in this article’s title and the time period of data is the last 60 months ending on the last trading date of the previous month.
All return numbers are trailing point-to-point returns and are not rolling returns. The funds all belong to the Direct Growth plan.
The impact of other fund metrics like expense ratio (TER) and fund size (AuM) are indirectly captured by Tracking Error and Tracking Difference:
- higher expenses imply a higher Tracking Difference and vice versa
- larger fund sizes imply a higher Tracking Error for more liquid stocks and vice versa
Funds and benchmarks covered in this article
We cover these benchmarks in this article:
| Benchmark | Count |
|---|---|
| NIFTY 100 | 3 |
| Nifty 50 | 18 |
| Nifty 500 | 1 |
| NIFTY ALPHALOWVOL | 1 |
| Nifty Auto | 1 |
| Nifty Bank | 3 |
| NIFTY INDIA MFG | 1 |
| Nifty IT | 1 |
| NIFTY LARGEMID250 | 1 |
| Nifty Low Volatility 50 | 2 |
| Nifty Midcap 150 | 6 |
| NIFTY M150 QLTY50 | 2 |
| Nifty Midcap 50 | 1 |
| Nifty Midcap150 Momentum 50 | 2 |
| Nifty Next 50 | 12 |
| Nifty Pharma | 1 |
| NIFTY Smallcap 250 | 5 |
| NIFTY Smallcap 50 | 2 |
| NIFTY100 EQL WGT | 2 |
| NIFTY100 LOWVOL30 | 1 |
| NIFTY100 QUALTY30 | 1 |
| Nifty200Momentm30 | 4 |
| NIFTY50 EQL WGT | 4 |
| Nifty50 Value 20 | 1 |
| Sensex TRI | 6 |
| Total | 83 |
We will now show one list of common Index funds as a sample and the complete dataset is available at the bottom of the article.
Index funds tracking the Sensex TRI
What are the Benchmark returns for the Sensex TRI
| Benchmark | Sensex TRI |
|---|---|
| BM 1Y | 21.60% |
| BM 2Y | 11.78% |
| BM 3Y | 15.20% |
| BM 4Y | 17.29% |
| BM 5Y | 15.84% |
Fund returns
| Name | Fund 1Y | Fund 2Y | Fund 3Y | Fund 4Y | Fund 5Y |
|---|---|---|---|---|---|
| Benchmark | 21.60% | 11.78% | 15.20% | 17.29% | 15.84% |
| Average | 24.21% | 14.70% | 14.85% | 18.35% | 16.10% |
| DSP AMC Sensex Tri Index fund | 24.28% | 14.74% | 14.96% | 18.37% | 16.13% |
| LIC AMC Sensex Tri Index fund | 24.22% | 14.70% | 14.86% | 18.51% | 16.20% |
| Navi AMC Sensex Tri Index fund | 24.12% | 14.56% | 14.80% | 18.23% | 15.97% |
| Sundaram AMC Sensex Tri Index fund | 24.35% | 14.79% | 14.99% | 18.48% | 16.20% |
| Taurus AMC Sensex Tri Index fund | 24.10% | 14.62% | 14.66% | 18.16% | 15.99% |
| Bandhan AMC Sensex Tri Index fund | 24.19% | 14.80% | NA | NA | NA |
Tracking difference (alpha over benchmark)
| Name | Alpha 1Y | Alpha 2Y | Alpha 3Y | Alpha 4Y | Alpha 5Y |
|---|---|---|---|---|---|
| Average | 2.61% | 2.92% | -0.34% | 1.06% | 0.26% |
| DSP AMC Sensex Tri Index fund | 2.68% | 2.96% | -0.24% | 1.08% | 0.29% |
| LIC AMC Sensex Tri Index fund | 2.62% | 2.92% | -0.34% | 1.21% | 0.37% |
| Navi AMC Sensex Tri Index fund | 2.52% | 2.78% | -0.40% | 0.94% | 0.13% |
| Sundaram AMC Sensex Tri Index fund | 2.75% | 3.00% | -0.20% | 1.19% | 0.36% |
| Taurus AMC Sensex Tri Index fund | 2.50% | 2.83% | -0.54% | 0.86% | 0.15% |
| Bandhan AMC Sensex Tri Index fund | 2.59% | 3.02% | NA | NA | NA |
Tracking error
| Name | TE 1Y | TE 2Y | TE 3Y | TE 4Y | TE 5Y |
|---|---|---|---|---|---|
| Average | 3.12% | 6.17% | 2.80% | 2.01% | 1.33% |
| DSP AMC Sensex Tri Index fund | 3.12% | 6.11% | 2.78% | 2.10% | 1.38% |
| LIC AMC Sensex Tri Index fund | 3.12% | 6.11% | 2.78% | 1.56% | 1.03% |
| Navi AMC Sensex Tri Index fund | 3.10% | 6.11% | 2.77% | 2.11% | 1.41% |
| Sundaram AMC Sensex Tri Index fund | 3.11% | 6.08% | 2.77% | 2.10% | 1.40% |
| Taurus AMC Sensex Tri Index fund | 3.12% | 6.42% | 2.91% | 2.16% | 1.43% |
| Bandhan AMC Sensex Tri Index fund | NA | NA | NA | NA | NA |
You can download the full list of funds here: list
Related Articles
- What are the best index funds for new investors in India?
- Which are the best and worst ETFs of India in Mar-2024?
- Which index funds to invest in and why?
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