Table of Contents
What are Passive Funds?
Passive funds are a type of funds that consistently tracks a Market index to allow a fund get maximum gains. It invests in a Portfolio that replicates a Market Index like Nifty, the Sensex, etc. All the securities along with their proportion in the portfolio will be the same as the index the fund is tracking.
In passive funds, the fund manager does not actively choose what stocks will make up the fund. This is one of the reasons passive funds are easier to invest than active funds. Investors buy passive funds when they want their returns to be in line with the market. These funds are low-cost funds as there are no costs involved in selecting stocks and researching.
Types of Passive Funds
Passive funds are of two types, such as -
1. Index Funds
Index Funds are an open-ended scheme where the investors buy and redeem units of the Mutual Funds at the net-asset values. In other words, the performance of an index fund is dependent on the performance of a particular index. Index funds contain shares in a similar proportion as they are in a particular index.
2. Exchange Traded Funds (ETFs)
The units of exchange-traded funds are randomly listed on a stock exchange. Investors buy and sell units at real-time prices through Demat account.
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Difference Between Passive Funds and Active Funds
There are specific differences in the way they function and affect the investor.
The tabular differentiates between passive funds and active funds:
| Passive Funds | Active Funds |
|---|---|
| The fund manager does not actively participate in selecting funds | Fund managers commit to a lot of research and take steps accordingly to select funds in various securities based on market performance |
| Costs less | Costs more |
| Popularity because of the low-expense ratio | Costlier management makes it less popular |
How Passive Funds is Gaining Trust?
In 2019, Indian investors found that passive mutual funds were trustworthy. The total assets managed by passive funds, including gold and ETFs along with other index funds were huge. It was found that it stood at Rs. 177,181 crore on November 30, 2019. The Association of Mutual Funds in India (AMFI) stated that index funds had gathered an AUM of Rs. 7717 crore on November 2019. Passive large-cap ETFs offer returns of 11.53% compared to actively managed Large cap funds that offered 10.19%.
gold ETFs stood at Rs. 5,540.40 crore as of November 2019. This comes in comparison to Rs. 4,571 crore in December 2018. The AUM of other ETFs
stood at Rs. 1,63,923.66 crore, as compared to Rs. 1,07,363 crore at the end of 2018. A large part of 2019 witnessed that large-cap schemes were at the top of return charts. Even in 2020, nine out of the top 15 large-cap schemes are passive funds.
Passive Funds Amid Coronavirus Pandemic
With the current situation across the globe, the financial markets are facing issues of deep concern. While investors were willing to take a risk in the past, today’s conditions have pushed the majority of the investors to look for a Safe Haven. This means they are looking for an investment that will yield higher returns or at least stable returns. Several investors are now looking to invest through passive modes such as exchange-traded funds or index funds. As per AMFI, Inflow into the index funds faced an all-time high of Rs. 2076.5 crore in March 2020.
Best Passive Funds 2025 - 2026
With the growing popularity of passive mutual funds, the chances of gaining higher returns are higher. Here are the best passive mutual funds you can choose to invest:
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2024 (%) LIC MF Index Fund Sensex Growth ₹140.638
↓ -0.80 ₹82 -2.5 -7.1 3.8 9.5 13 8.2 Nippon India Index Fund - Sensex Plan Growth ₹38.1187
↓ -0.22 ₹789 -2.4 -6.9 4.4 9.9 13.5 8.9 SBI Nifty Index Fund Growth ₹200.471
↓ -1.03 ₹8,752 -2.3 -7.8 4.1 10.5 14.1 9.5 IDBI Nifty Index Fund Growth ₹36.2111
↓ -0.02 ₹208 9.1 11.9 16.2 20.3 11.7 Franklin India Index Fund Nifty Plan Growth ₹183.106
↓ -0.94 ₹681 -2.3 -7.7 4.1 10.4 13.9 9.5 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 21 Feb 25
*Below is the list for Index Mutual Funds having atleast 15 Crore or more in Net Assets.
The main investment objective of the fund is to generate returns commensurate with the performance of the index either Nifty / Sensex based on the plans by investing in the respective index stocks subject to tracking errors. LIC MF Index Fund Sensex is a Others - Index Fund fund was launched on 14 Nov 02. It is a fund with Moderately High risk and has given a Below is the key information for LIC MF Index Fund Sensex Returns up to 1 year are on The primary investment objective of the scheme is to replicate the composition of the Sensex, with a view to generate returns that are commensurate with the performance of the Sensex, subject to tracking errors. Nippon India Index Fund - Sensex Plan is a Others - Index Fund fund was launched on 28 Sep 10. It is a fund with Moderately High risk and has given a Below is the key information for Nippon India Index Fund - Sensex Plan Returns up to 1 year are on The scheme will adopt a passive investment strategy. The scheme will
invest in stocks comprising the Nifty 50 Index in the same proportion as in the
index with the objective of achieving returns equivalent to the Total Returns
Index of Nifty 50 Index by minimizing the performance difference between the
benchmark index and the scheme. The Total Returns Index is an index that
reflects the returns on the index from index gain/loss plus dividend payments
by the constituent stocks. SBI Nifty Index Fund is a Others - Index Fund fund was launched on 17 Jan 02. It is a fund with Moderately High risk and has given a Below is the key information for SBI Nifty Index Fund Returns up to 1 year are on The investment objective of the scheme is to invest in the stocks and equity related instruments comprising the S&P CNX Nifty Index in the same weights as these stocks represented in the Index with the intent to replicate the performance of the Total Returns Index of S&P CNX Nifty index. The scheme will adopt a passive investment strategy and will seek to achieve the investment objective by minimizing the tracking error between the S&P CNX Nifty index (Total Returns Index) and the scheme. IDBI Nifty Index Fund is a Others - Index Fund fund was launched on 25 Jun 10. It is a fund with Moderately High risk and has given a Below is the key information for IDBI Nifty Index Fund Returns up to 1 year are on The Investment Objective of the Scheme is to invest in companies whose securities are included in the Nifty and subject to tracking errors, endeavouring to attain results commensurate with the Nifty 50 under NSENifty Plan Franklin India Index Fund Nifty Plan is a Others - Index Fund fund was launched on 4 Aug 00. It is a fund with Moderately High risk and has given a Below is the key information for Franklin India Index Fund Nifty Plan Returns up to 1 year are on 1. LIC MF Index Fund Sensex
CAGR/Annualized return of 13.1% since its launch. Ranked 79 in Index Fund category. Return for 2024 was 8.2% , 2023 was 19% and 2022 was 4.6% . LIC MF Index Fund Sensex
Growth Launch Date 14 Nov 02 NAV (21 Feb 25) ₹140.638 ↓ -0.80 (-0.56 %) Net Assets (Cr) ₹82 on 31 Jan 25 Category Others - Index Fund AMC LIC Mutual Fund Asset Mgmt Co Ltd Rating ☆ Risk Moderately High Expense Ratio 0.98 Sharpe Ratio 0.14 Information Ratio -8.72 Alpha Ratio -1.14 Min Investment 5,000 Min SIP Investment 1,000 Exit Load 0-1 Months (1%),1 Months and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Jan 20 ₹10,000 31 Jan 21 ₹11,388 31 Jan 22 ₹14,262 31 Jan 23 ₹14,664 31 Jan 24 ₹17,712 31 Jan 25 ₹19,147 Returns for LIC MF Index Fund Sensex
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 21 Feb 25 Duration Returns 1 Month -0.7% 3 Month -2.5% 6 Month -7.1% 1 Year 3.8% 3 Year 9.5% 5 Year 13% 10 Year 15 Year Since launch 13.1% Historical performance (Yearly) on absolute basis
Year Returns 2024 8.2% 2023 19% 2022 4.6% 2021 21.9% 2020 15.9% 2019 14.6% 2018 5.6% 2017 27.4% 2016 1.6% 2015 -5.4% Fund Manager information for LIC MF Index Fund Sensex
Name Since Tenure Sumit Bhatnagar 3 Oct 23 1.33 Yr. Data below for LIC MF Index Fund Sensex as on 31 Jan 25
Asset Allocation
Asset Class Value Cash 0.05% Equity 99.95% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Mar 09 | HDFCBANK15% ₹12 Cr 68,615
↓ -48 ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 09 | 53217410% ₹8 Cr 63,975
↓ -97 Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 09 | RELIANCE9% ₹7 Cr 61,383
↓ -232 Infosys Ltd (Technology)
Equity, Since 31 Mar 09 | INFY7% ₹6 Cr 32,839
↓ -90 ITC Ltd (Consumer Defensive)
Equity, Since 30 Sep 11 | ITC5% ₹4 Cr 83,877
↓ -190 Bharti Airtel Ltd (Communication Services)
Equity, Since 30 Apr 09 | BHARTIARTL5% ₹4 Cr 24,340
↓ -36 Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Mar 09 | LT5% ₹4 Cr 10,623
↓ -22 Tata Consultancy Services Ltd (Technology)
Equity, Since 31 Mar 09 | TCS5% ₹4 Cr 9,138
↓ -73 State Bank of India (Financial Services)
Equity, Since 31 Mar 09 | SBIN3% ₹3 Cr 34,958
↑ 27 Axis Bank Ltd (Financial Services)
Equity, Since 31 Dec 13 | 5322153% ₹3 Cr 25,839
↓ -86 2. Nippon India Index Fund - Sensex Plan
CAGR/Annualized return of 9.7% since its launch. Ranked 74 in Index Fund category. Return for 2024 was 8.9% , 2023 was 19.5% and 2022 was 5% . Nippon India Index Fund - Sensex Plan
Growth Launch Date 28 Sep 10 NAV (21 Feb 25) ₹38.1187 ↓ -0.22 (-0.56 %) Net Assets (Cr) ₹789 on 31 Jan 25 Category Others - Index Fund AMC Nippon Life Asset Management Ltd. Rating ☆☆ Risk Moderately High Expense Ratio 0.58 Sharpe Ratio 0.2 Information Ratio -10.07 Alpha Ratio -0.56 Min Investment 5,000 Min SIP Investment 100 Exit Load 0-7 Days (0.25%),7 Days and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Jan 20 ₹10,000 31 Jan 21 ₹11,450 31 Jan 22 ₹14,404 31 Jan 23 ₹14,863 31 Jan 24 ₹18,021 31 Jan 25 ₹19,592 Returns for Nippon India Index Fund - Sensex Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 21 Feb 25 Duration Returns 1 Month -0.6% 3 Month -2.4% 6 Month -6.9% 1 Year 4.4% 3 Year 9.9% 5 Year 13.5% 10 Year 15 Year Since launch 9.7% Historical performance (Yearly) on absolute basis
Year Returns 2024 8.9% 2023 19.5% 2022 5% 2021 22.4% 2020 16.6% 2019 14.2% 2018 6.2% 2017 27.9% 2016 2% 2015 -4.7% Fund Manager information for Nippon India Index Fund - Sensex Plan
Name Since Tenure Himanshu Mange 23 Dec 23 1.11 Yr. Data below for Nippon India Index Fund - Sensex Plan as on 31 Jan 25
Asset Allocation
Asset Class Value Cash 0.08% Equity 99.92% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Oct 10 | HDFCBANK15% ₹114 Cr 640,852
↑ 12,902 ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 10 | 53217410% ₹77 Cr 597,544
↑ 11,246 Reliance Industries Ltd (Energy)
Equity, Since 31 Oct 10 | RELIANCE9% ₹70 Cr 573,069
↑ 9,833 Infosys Ltd (Technology)
Equity, Since 31 Oct 10 | INFY7% ₹58 Cr 305,954
↑ 5,236 ITC Ltd (Consumer Defensive)
Equity, Since 29 Feb 12 | ITC5% ₹38 Cr 784,045
↑ 13,669 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Oct 10 | BHARTIARTL5% ₹36 Cr 226,675
↑ 3,930 Larsen & Toubro Ltd (Industrials)
Equity, Since 29 Feb 12 | LT5% ₹36 Cr 98,988
↑ 1,693 Tata Consultancy Services Ltd (Technology)
Equity, Since 31 Oct 10 | TCS5% ₹35 Cr 85,802
↑ 1,467 State Bank of India (Financial Services)
Equity, Since 31 Oct 10 | SBIN3% ₹26 Cr 325,028
↑ 5,559 Axis Bank Ltd (Financial Services)
Equity, Since 31 Dec 13 | 5322153% ₹26 Cr 241,109
↑ 4,305 3. SBI Nifty Index Fund
CAGR/Annualized return of 14% since its launch. Ranked 75 in Index Fund category. Return for 2024 was 9.5% , 2023 was 20.7% and 2022 was 5.1% . SBI Nifty Index Fund
Growth Launch Date 17 Jan 02 NAV (21 Feb 25) ₹200.471 ↓ -1.03 (-0.51 %) Net Assets (Cr) ₹8,752 on 31 Jan 25 Category Others - Index Fund AMC SBI Funds Management Private Limited Rating ☆ Risk Moderately High Expense Ratio 0.5 Sharpe Ratio 0.22 Information Ratio -21.33 Alpha Ratio -0.55 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-15 Days (0.2%),15 Days and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Jan 20 ₹10,000 31 Jan 21 ₹11,369 31 Jan 22 ₹14,526 31 Jan 23 ₹14,905 31 Jan 24 ₹18,434 31 Jan 25 ₹20,089 Returns for SBI Nifty Index Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 21 Feb 25 Duration Returns 1 Month -0.9% 3 Month -2.3% 6 Month -7.8% 1 Year 4.1% 3 Year 10.5% 5 Year 14.1% 10 Year 15 Year Since launch 14% Historical performance (Yearly) on absolute basis
Year Returns 2024 9.5% 2023 20.7% 2022 5.1% 2021 24.7% 2020 14.6% 2019 12.5% 2018 3.8% 2017 29.1% 2016 3.4% 2015 -4.2% Fund Manager information for SBI Nifty Index Fund
Name Since Tenure Raviprakash Sharma 1 Feb 11 14.01 Yr. Pradeep Kesavan 1 Dec 23 1.17 Yr. Data below for SBI Nifty Index Fund as on 31 Jan 25
Asset Allocation
Asset Class Value Equity 100.1% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Mar 03 | HDFCBANK13% ₹1,097 Cr 6,190,301
↑ 111,014 ICICI Bank Ltd (Financial Services)
Equity, Since 31 Jan 03 | ICICIBANK9% ₹736 Cr 5,743,954
↑ 97,678 Reliance Industries Ltd (Energy)
Equity, Since 31 Jan 03 | RELIANCE8% ₹672 Cr 5,526,199
↑ 90,903 Infosys Ltd (Technology)
Equity, Since 31 Jan 03 | INFY6% ₹551 Cr 2,932,321
↑ 47,927 ITC Ltd (Consumer Defensive)
Equity, Since 29 Feb 12 | ITC4% ₹366 Cr 7,568,576
↑ 113,542 Bharti Airtel Ltd (Communication Services)
Equity, Since 29 Feb 04 | BHARTIARTL4% ₹347 Cr 2,183,303
↑ 35,175 Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Dec 04 | LT4% ₹346 Cr 958,324
↑ 14,870 Tata Consultancy Services Ltd (Technology)
Equity, Since 28 Feb 05 | TCS4% ₹341 Cr 831,933
↑ 12,794 State Bank of India (Financial Services)
Equity, Since 31 Jan 03 | SBIN3% ₹249 Cr 3,132,754
↑ 49,346 Axis Bank Ltd (Financial Services)
Equity, Since 28 Feb 10 | 5322153% ₹247 Cr 2,321,552
↑ 37,352 4. IDBI Nifty Index Fund
CAGR/Annualized return of 10.3% since its launch. Ranked 83 in Index Fund category. . IDBI Nifty Index Fund
Growth Launch Date 25 Jun 10 NAV (28 Jul 23) ₹36.2111 ↓ -0.02 (-0.06 %) Net Assets (Cr) ₹208 on 30 Jun 23 Category Others - Index Fund AMC IDBI Asset Management Limited Rating ☆ Risk Moderately High Expense Ratio 0.9 Sharpe Ratio 1.04 Information Ratio -3.93 Alpha Ratio -1.03 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Growth of 10,000 investment over the years.
Date Value 31 Jan 20 ₹10,000 31 Jan 21 ₹11,376 31 Jan 22 ₹14,393 31 Jan 23 ₹14,714 Returns for IDBI Nifty Index Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 21 Feb 25 Duration Returns 1 Month 3.7% 3 Month 9.1% 6 Month 11.9% 1 Year 16.2% 3 Year 20.3% 5 Year 11.7% 10 Year 15 Year Since launch 10.3% Historical performance (Yearly) on absolute basis
Year Returns 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 Fund Manager information for IDBI Nifty Index Fund
Name Since Tenure Data below for IDBI Nifty Index Fund as on 30 Jun 23
Asset Allocation
Asset Class Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 5. Franklin India Index Fund Nifty Plan
CAGR/Annualized return of 12.6% since its launch. Ranked 76 in Index Fund category. Return for 2024 was 9.5% , 2023 was 20.2% and 2022 was 4.9% . Franklin India Index Fund Nifty Plan
Growth Launch Date 4 Aug 00 NAV (21 Feb 25) ₹183.106 ↓ -0.94 (-0.51 %) Net Assets (Cr) ₹681 on 31 Jan 25 Category Others - Index Fund AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆ Risk Moderately High Expense Ratio 0.62 Sharpe Ratio 0.22 Information Ratio -3.7 Alpha Ratio -0.58 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-30 Days (1%),30 Days and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Jan 20 ₹10,000 31 Jan 21 ₹11,382 31 Jan 22 ₹14,494 31 Jan 23 ₹14,852 31 Jan 24 ₹18,316 31 Jan 25 ₹19,954 Returns for Franklin India Index Fund Nifty Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 21 Feb 25 Duration Returns 1 Month -0.9% 3 Month -2.3% 6 Month -7.7% 1 Year 4.1% 3 Year 10.4% 5 Year 13.9% 10 Year 15 Year Since launch 12.6% Historical performance (Yearly) on absolute basis
Year Returns 2024 9.5% 2023 20.2% 2022 4.9% 2021 24.3% 2020 14.7% 2019 12% 2018 3.2% 2017 28.3% 2016 3.3% 2015 -3.6% Fund Manager information for Franklin India Index Fund Nifty Plan
Name Since Tenure Sandeep Manam 18 Oct 21 3.29 Yr. Shyam Sriram 26 Sep 24 0.35 Yr. Data below for Franklin India Index Fund Nifty Plan as on 31 Jan 25
Asset Allocation
Asset Class Value Cash 0.35% Equity 99.65% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jan 03 | HDFCBANK13% ₹86 Cr 485,834
↓ -1,539 ICICI Bank Ltd (Financial Services)
Equity, Since 31 Jan 10 | ICICIBANK8% ₹58 Cr 451,229
↓ -1,429 Reliance Industries Ltd (Energy)
Equity, Since 31 Jan 03 | RELIANCE8% ₹53 Cr 434,368
↓ -1,376 Infosys Ltd (Technology)
Equity, Since 29 Feb 12 | INFY6% ₹43 Cr 230,509
↓ -731 ITC Ltd (Consumer Defensive)
Equity, Since 31 Mar 11 | ITC4% ₹29 Cr 595,778
↓ -1,887 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Mar 04 | BHARTIARTL4% ₹27 Cr 171,670
↓ -544 Larsen & Toubro Ltd (Industrials)
Equity, Since 30 Jun 12 | LT4% ₹27 Cr 75,397
↓ -239 Tata Consultancy Services Ltd (Technology)
Equity, Since 28 Feb 05 | TCS4% ₹27 Cr 65,462
↓ -207 State Bank of India (Financial Services)
Equity, Since 31 Jan 03 | SBIN3% ₹20 Cr 246,414
↓ -780 Axis Bank Ltd (Financial Services)
Equity, Since 30 Jun 09 | 5322153% ₹19 Cr 182,545
↓ -578
Conclusion
Passive funds are definitely proving to be a ray of hope for investors, especially in the current financial crisis. Before Investing in any passive mutual fund, make sure to read all schemes related documents carefully. This will help you gain an understanding of what to expect and what to give along with a sense of security.
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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