Top 5 index mutual funds with best SIP returns in 5 years: This 5-year-old fund is table topper; has turned Rs 25,000 monthly SIP into Rs 31 lakh
What are index mutual funds?: As the name suggests, index mutual funds follow a certain index, e.g., Nifty 50, Nifty 100, or BSE 500. They invest their money in the same companies that their parent index follows. If it's a Nifty 50 index mutual fund, it will invest in the same firms and in the same proportion as the Nifty 50 index has done. If some companies drop out of the index and are replaced by new ones, the index mutual fund will also change the proportion.
Top 5 index SIP mutual funds in 5 years: There are two roads. One is well-built but dimly lit, has hazy signboards with hardly understood instructions, and is heading to an unknown territory. There is another road that is of modest quality, well-lit, with bright signboards and clear instructions, and leading to a familiar territory. Which one will you pick? Most likely the second one. When a novice investor enters the mutual fund market with almost zero knowledge, they have many options to invest in, even if they pick equity funds. They can either pick schemes that may give high returns but are extremely volatile due to market fluctuations, or they can pick other schemes with modest returns and higher stability. Index mutual funds represent the second category. They follow an index, e.g., Nifty 50, Nifty 100, BSE 500.
So, when a new person with little knowledge enters the mutual fund market, they may invest in index funds since their money will be invested in the same companies that the index follows.
If it's a Nifty 50 index fund, it will invest in the same companies and in the same proportion as its parent index has done.
If some companies drop out of the index and are replaced by new ones, the fund will also change the proportion.
Index funds also go through fluctuations but are comparatively safer than mid- and small-cap heavy funds.
Not just beginners, but seasoned investors also park their money in index funds for their sheer stability.
Even though index funds are known more for their stability than their high returns, a number of them have given annualised SIP returns (XIRR) of up to 20.30 per cent in the five-year period.
Here, we take you through five of them and will tell you what the Rs 25,000 monthly SIP in each of the funds has become as of today's date.
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DSP Nifty Next 50 Index Fund - Direct - Growth
Launched in February 2019, the fund has given 29.30 per cent SIP returns in the five years. The fund's CAGR returns since its inception are 18.81 per cent. The fund has an asset base of Rs 613.85 crore, and the net asset value (NAV) of the fund is worth Rs 28.9436. Benchmarked against Nifty Next 50 TRI, the fund has an expense ratio of 0.30 per cent against the category average of 0.25 per cent. The fund's 99.95 per cent investments are in domestic equities, of which 49.03 per cent are in large caps. The fund has 50 stocks in its portfolio compared to 43.66 average stocks in the category. The large-cap heavy fund has Bharat Electronics Ltd, Trent Limited, Hindustan Aeronautics Limited, and Tata Power Ltd. as its main stocks.
A Rs 25,000 monthly SIP in the fund has given a total of Rs 30,84,603.
UTI Nifty Next 50 Index Fund - Direct Plan - Growth
Another fund in the list has given an annualised SIP return of 29.29 per cent in the five-year period. Launched in July 2019, the fund's CAGR return since its inception is 17.94 per cent. Its assets under management (AUM) is Rs 4,067.78 crore, while its NAV rate is Rs 27.0742. Benchmarked against Nifty Next 50 TRI, the fund has an expense ratio of 0.34 per cent. It has 99.98 per cent of its investments in equity with 49.04 per cent of them in large caps. In its portfolio of 50 stocks, the fund has its main investments in BEL, Trent, HAL, Tata Power, PFC, and REC Ltd.
A Rs 25,000 monthly SIP started five years ago has turned into a total of Rs 30,84,227.25.
ICICI Prudential Nifty Next 50 Index Fund - Direct Plan - Growth
The index fund has given 29.20 per annual SIP returns in the five years. Launched in January 2013, the fund's CAGR is 17.19 per cent. Its AUM is Rs 5,844.95 crore, while the NAV price is Rs 68.1973. The fund's benchmark is Nifty Next 50 TRI, while its expense ratio is 0.3 per cent.
The fund has 99.61 per cent of its investments in equity with 48.98 per cent of them in large-cap stocks. The fund has 50 stocks in its portfolio with Trent Limited, BEL, HAL, Tata Power, PFC, and InterGlobe Aviation as its main stocks.
A Rs 25,000 monthly SIP in the fund started five years ago has swelled to Rs 30,77,701.5.
LIC MF Nifty Next 50 Index Fund - Direct Plan - Growth
The fund has given a 5-year annualised SIP return of 29.13 per cent. The fund has given a CAGR return of 17.02 per cent since its inception in January 2013. Its AUM is Rs 90.25 crore, and the NAV price is Rs 59.7262. Benchmarked against Nifty Next 50 TRI, the fund has an expense ratio of 0.32 per cent. The fund's 99.44 per cent investments are in equity with 48.94 per cent of them in large caps. Its 50-stock portfolio has Trent, BEL, HAL, Tata Power, and PFC as its main stocks.
A Rs 25,000 monthly SIP in the fund has given a total of Rs 30,72,663 in the five-year period.
Sundaram Nifty 100 Equal Weight Fund - Direct Plan - Growth
The fund in the No. 5 position has given annual SIP returns of 26.33 per cent in the five-year period. Its CAGR since its inception in January 2013 is 14.02 per cent. Benchmarked against NIFTY 100 Equal Weighted TRI, the fund has an expense ratio of 0.57 per cent. It has its 96.60 per cent investments in equity with 61.72 per cent of them in large caps. The fund has a large number of stocks at 101 against the category average of 43.66. The fund has Vendata Ltd, HAL, BEL, Adani Power, and Seimens Ltd.
A Rs 25,000 monthly SIP in the fund has turned into Rs 2874371.25 in the five-year period.