Best Index Funds India 2026: Nifty 50, Nifty Next 50 & Midcap 150 Returns Compared

Disclaimer: Mutual fund investments are subject to market risks. Past returns are NOT a guarantee of future performance. This article is for educational purposes only. Consult a SEBI-registered investment advisor before investing.

Index funds in India have exploded in popularity since 2018. With zero fund manager bias, low expense ratios (as low as 0.10%), and direct correlation to benchmark indices, they're the ideal starting investment for most Indians.

Here's a comprehensive breakdown of which index to choose based on your risk appetite and investment horizon.

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1. Understanding the Major Indian Indices

Index	Companies Included	Market Cap Focus	Volatility
Nifty 50	Top 50 NSE companies	Large Cap	Low
Nifty Next 50	51st–100th largest NSE companies	Large-Mid Cap	Moderate
Nifty Midcap 150	Mid-sized 150 companies	Mid Cap	High
Nifty 500	Top 500 companies	Large+Mid+Small	Moderate
Nifty Smallcap 250	Smaller 250 companies	Small Cap	Very High

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2. Historical Returns Comparison (As of June 2026)

Index	1-Year Return	3-Year CAGR	5-Year CAGR	10-Year CAGR
Nifty 50	14.2%	12.8%	14.6%	13.1%
Nifty Next 50	19.4%	15.2%	16.8%	14.7%
Nifty Midcap 150	22.7%	18.9%	20.4%	16.2%
Nifty Smallcap 250	27.1%	20.1%	18.7%	14.3%
S&P BSE Sensex	13.8%	12.4%	14.1%	12.9%

Data source: NSE India historical data, AMFI returns data.

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3. Best Index Funds in India — Fund-Wise Comparison

Nifty 50 Index Funds

Fund Name	AMC	Expense Ratio (Direct)	5-Yr CAGR
UTI Nifty 50 Index Fund	UTI	0.18%	14.4%
HDFC Nifty 50 Index Fund	HDFC	0.20%	14.2%
Nippon India Nifty 50 Index	Nippon	0.20%	14.1%
Motilal Oswal Nifty 50 Index	Motilal	0.15%	14.3%

Winner: Motilal Oswal (lowest expense ratio + competitive returns)

Nifty Next 50 Index Funds

Fund Name	AMC	Expense Ratio	5-Yr CAGR
UTI Nifty Next 50 Index	UTI	0.30%	16.7%
HDFC Nifty Next 50 Index	HDFC	0.30%	16.5%
Nippon India Nifty Next 50	Nippon	0.28%	16.8%

Nifty Midcap 150 Index Funds

Fund Name	AMC	Expense Ratio	5-Yr CAGR
Motilal Oswal Nifty Midcap 150	Motilal	0.30%	20.1%
Nippon India Nifty Midcap 150	Nippon	0.35%	19.8%

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4. How to Choose the Right Index

Risk-Based Framework

Conservative (Low Risk):
  → 100% Nifty 50 Index Fund
  → 15-year+ horizon needed to ride out volatility

Moderate (Medium Risk):
  → 60% Nifty 50 + 30% Nifty Next 50 + 10% Midcap 150
  → 10+ year horizon recommended

Aggressive (High Risk):
  → 40% Nifty 50 + 30% Nifty Next 50 + 30% Midcap 150
  → 10–15 year horizon, accept 30–40% interim drawdowns

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5. ₹5,000/Month SIP Projection (Historical CAGR Basis)

SIP Amount	Duration	Index (CAGR)	Expected Corpus
₹5,000/month	10 years	Nifty 50 (13%)	₹11.4 Lakhs
₹5,000/month	20 years	Nifty 50 (13%)	₹52.7 Lakhs
₹5,000/month	10 years	Midcap 150 (19%)	₹15.9 Lakhs
₹5,000/month	20 years	Midcap 150 (19%)	₹1.12 Crore

Use the SIP Calculator on Learntrix to model your own projections.

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6. How to Invest: Step-by-Step

1. Open a Demat + MF account: Zerodha Coin, Groww, Kuvera (direct plans, zero commission)
2. Choose Direct Plan: Always choose "Direct Growth" — not Regular plan (saves 0.5–1% in annual fees)
3. Set up SIP: Auto-debit on 1st or 7th of every month
4. CAMS/KFintech: Track all holdings centrally at camsonline.com
5. Don't stop SIP in crashes: Market downturns = cheaper units. SIP benefits from rupee cost averaging.

Investing in index funds via SIP is a proven, globally validated strategy. Warren Buffett has publicly recommended index funds for 90% of retail investors.