Investing has changed a lot over the past few years, and one of the recent additions in 2025 is the rise of Specialized Investment Funds (SIFs). With features of derivatives and the flexibility of mutual funds, SIFs give investors a dynamic way to handle different market conditions. In this blog, we will walk through what SIFs are, who they are ideal for, and the top SIFs launched in India so far.
What is SIF?
A Specialized Investment Fund (SIF) is a new kind of investment option in India that sits right between regular mutual funds and high-ticket PMS/AIF products. Consider it as a middle path: more flexible than a mutual fund but far more feasible than PMS or AIF, which usually require very large investments.
With SIFs, AMCs get the freedom to use more advanced strategies, like long-short investing, derivatives, or a mix of equity and debt, all under SEBI rules. And for investors, the entry barrier is much lower compared to PMS or AIF. SIFs start with a minimum investment of ₹10 lakh. They bridge a long-existing gap between MF & PMS/AIF.
Top Specialized Investment Funds 2026
1. Quant Mutual Fund – QSIF Range
Quant offers some of the most active strategies in the market. Their SIF range includes:
Equity Long-Short Fund -Targets mid- and small-cap opportunities while using short positions to control risk.
Hybrid Long-Short Fund – A mix of equity, debt, and derivatives for a more balanced feel.
Equity Ex -Top 100 Long-Short Fund – Focuses on companies outside the top 100, with higher potential but higher volatility too.
2. Edelweiss Mutual Fund – Altiva SIF
Edelweiss runs its SIFs under the Altiva brand
Their main product is a Hybrid Long-Short Fund that spreads money across equity, debt, arbitrage, and even special situations.
It is curated in such a way that it can stay steady in both good and bad markets by managing risk smartly.
3. SBI Mutual Fund – Magnum SIF
SBI has created one of the most versatile SIFs called Magnum SIF.
Their core strategy is a Hybrid Long-Short Fund that shifts between equity, debt, and derivatives depending on market conditions.
The objective is to keep returns smoother rather than letting the portfolio swing wildly.
4. Union Mutual Fund – Arthaya SIF
Union MF offers its SIF under the name Arthaya SIF.
This platform blends equity, debt, and derivatives using a long-short approach.
It seems more measured and steady compared to the more aggressive AMCs.
5. Bandhan Mutual Fund – Arudha SIF
Bandhan AMC has stepped into the SIF with Arudha SIF.
The fund uses equity, debt, and derivative-based long-short strategies.
The idea is to offer something more flexible and advanced than a basic mutual fund.
6. ITI Mutual Fund – Divinity SIF
ITI MF runs its SIF under Divinity SIF.
The key offering is the Divinity Equity Long-Short Fund, which tries to capture upside while protecting the investors against downturns.
It uses long-short investing to balance growth and safety.
7. 60 ONE – Dyna SIF
360 ONE (formerly IIFL Wealth) offers its SIFs under the Dyna SIF brand. These funds follow long-short and multi-asset strategies with an institutional, risk-managed approach.
Someone who wants more flexible strategies – If you feel traditional mutual funds are too boring and you are curious about derivatives, SIFs are a great option.
Anyone investing with a medium- to long-term mindset – SIFs generally work better if you are willing to stay invested for 3-5 years or more. Not ideal for someone who wants to exit quickly.
Investors comfortable with the ₹10 lakh minimum – Most SIFs require at least ₹10 lakh, so they’re a good fit for HNIs, seasoned investors, family offices, etc.
People who want MF transparency but PMS/AIF-style strategies – SIFs sit perfectly in the middle; you get the comfort of mutual fund regulation, but with the kind of strategies usually seen in PMS or AIF products.
Conclusion
Although SIFs are relatively new to the investment space, they have already gained popularity. If you do not have a problem with taking extra risk for a better overall investment strategy, then you should consider including SIFs as a part of your portfolio. Before investing, you should understand how they work, learn about the minimum investment amount and find a known fund house. With a long-term perspective, you will be able to add further strength and stability to your wealth-creation goals using SIFs.
S.NO.
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In today’s world of investment, there are various options which confuses investors about which option is suitable for them. A few of such options include mutual funds and hedge funds, each offering different risk levels, strategies, and returns, making it essential for investors to understand their goals clearly.
In today’s blog post, we will give you an overview of mutual funds and hedge funds, along with their differences and in the end, will tell you which one is suitable for you.
What are Mutual Funds?
A Mutual Fund is an investment product which is offered by Asset management companies. In which the company collects funds from investors and appoints a fund manager to manage such funds by investing them in different assets, such as stocks, bonds, etc.
Features of Mutual Funds
The key features of a mutual fund are as follows:
Professionally Managed Funds: The funds invested by the investors are managed by professional fund managers, who have vast experience in fund management.
Diversified Portfolio: The fund is invested by the fund manager in different asset classes such as bonds, equity, gold, etc., which reduces overall risk.
Low-cost: The fees charged by the asset management company are very low compared to other investment options.
Affordable: One can start their investment in mutual funds by investing a minimum of INR 100 – 500.
What are Hedge Funds?
A Hedge Fund is managed privately by the fund manager that pools money from various HNI investors, including retail and institutional investors. They use aggressive strategies such as short-selling, derivatives, etc., to generate returns. The hedge funds have limited regulations, unlike mutual funds.
Features of Hedge Funds
The key features of hedge funds are as follows:
Aggressive Investment Strategy: Hedge funds employ high-risk, aggressive investment strategies, including short-selling, leverage, and derivatives.
HNI Investors: Retail and institutional investors who have high net worth can consider investing in hedge funds.
Performance Fees: Hedge funds generally charge performance-based fees, in addition to a fixed fee structure. However, the type of fees depends on the asset management company.
Difference Between Mutual Funds and Hedge Funds
The key differences between mutual funds and hedge funds are as follows:
Particular
Mutual Fund
Hedge Fund
Investor
Mutual funds are allowed for all kinds of investors, especially for retail investors.
Hedge funds are allowed for high-net-worth individuals and institutional investors.
Returns
These funds aim to outperform the benchmark or give returns similar to the benchmark.
Hedge funds aim to give a positive return in every market condition.
Strategies
Fund managers in mutual funds do not use any complex strategies.
Complex strategies such as derivatives, short-selling, etc., are used by the fund manager.
Regulated
Mutual funds are strictly regulated by the Securities and Exchange Board of India.
They are comparatively less regulated than mutual funds.
Transparency
Mutual funds offer high transparency with respect to portfolio disclosure, etc.
Hedge funds offer comparatively low transparency compared to mutual funds.
Fees
It charges low fees for managing funds.
Hedge funds charge higher fees when compared to mutual funds.
Minimum Investment
The minimum investment amount in mutual funds starts from INR 100.
In the case of hedge funds, the minimum investment amount is 1 crore.
Mutual Fund vs Hedge Fund – Which is better?
The decision between the mutual fund and the hedge fund will depend on the risk profile of the investor and their investment objective. They can invest in mutual funds in case they want to invest in a low-cost investment option with moderate risk and return. However, if you want to get a higher return and are willing to take a higher risk, then you can choose to invest in hedge funds; however, they charge higher fees than mutual funds.
On a concluding note, both mutual funds and hedge funds are suitable for different classes of investors. If you have a high net worth and are comfortable with taking high risk, then a hedge fund is a suitable investment option for you, as we know that with higher risk comes higher returns; therefore, hedge funds offer higher returns. Whereas, on the other hand, mutual funds are suitable for investors looking for investment products with moderate risk and returns. However, it is advisable to consult your investment advisor before making any investment decision, and require deeper market understanding, stricter eligibility, and patience to navigate complex strategies aimed at maximizing wealth while managing volatility and long-term financial goals effectively.
S.NO.
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What are the key differences between mutual funds and hedge funds?
The key differences between mutual funds and hedge funds are related to their fees, investment amount, and fund management style.
Who can invest in hedge funds?
In hedge funds, all types of investors can invest their money, but they are generally open to accredited or high-net-worth individuals or institutional investors, because of their risky investment strategies.
What is the fee structure of hedge-funds?
Hedge funds charge higher fees than most other investment options. They follow two types of fee structure, which include fixed AUM-based fees, and the other one is performance-based fees; however, there are a few asset management companies which offer a combination of both types of fees.
What is the minimum investment amount for hedge funds and mutual funds?
The minimum investment required in mutual funds is INR 100, but in the case of a hedge fund, it is INR 1 crore.
Can hedge funds or mutual funds offer guaranteed returns?
No, hedge funds or mutual funds both of them do not offer guaranteed returns. The investment is made in market-related instruments, which can lead to volatility and inconsistent returns.
Investing in the stock market can be a rewarding and long-term wealth-building strategy. But for a beginner, it is difficult to identify which stock to invest in and to regularly monitor the portfolio. For such an investor, investment in a single fund known as the “Nifty50 Index Fund” can be a better choice.
In today’s blog post, we will make you understand the concept of Nifty50 Index Funds, along with the list of the best Nifty50 index funds in India 2026.
Meaning of Nifty50 Index Fund
A Nifty50 Index Fund is a type of mutual fund that mainly buys stocks of the 50 biggest companies on the Indian Stock Exchange based on market capitalisation. They are passively managed funds, and their portfolios are made up of the same companies as the Nifty50 Index. They do not wish to do better than the index; they simply want to replicate its performance.
Best Nifty50 Index Fund
Scheme Name
AUM (Crore)
Expense Ratio (%)
6 Months
1 Year
3 Years
UTI Nifty50 Index Fund Reg Gr
24335.81
0.17
14.14
2.32
14.22
HDFC Nifty50 Index Fund Gr
20929.71
0.20
14.12
2.28
14.19
Navi Nifty50 Index Fund Reg Gr
3436.14
0.06
14.19
2.39
14.27
Nippon India Index Fund Nifty50 Plan Growth Plan Growth Option
2606.59
0.07
14.18
2.40
14.23
Bandhan Nifty50 Index Fund Reg Gr
1952.97
0.10
14.18
2.39
14.25
Tata Nifty50 Index Fund Reg
1296.46
0.20
14.12
2.21
14.11
ABSL Nifty50 Index Gr Reg
1121.21
0.20
14.12
2.30
14.17
Kotak Nifty50 Index Fund Reg Gr
919.74
0.07
14.18
2.19
14.08
DSP Nifty50 Index Reg Gr
824.56
0.18
14.15
2.33
14.22
Motilal Oswal Nifty50 Index Reg Gr
738.34
0.51
14.15
2.34
14.26
Franklin India Index Fund NSE Nifty50 Index Fund Gr
737.22
0.25
14.06
2.32
14.13
Axis Nifty50 Index Fund Reg Gr
735.01
0.10
14.15
2.38
14.27
HSBC Nifty50 INDEX FUND Reg Gr
344.48
0.18
14.15
2.28
14.18
Edelweiss Nifty50 Index Reg Gr
186.71
0.05
14.18
2.37
14.12
Baroda BNP Paribas Nifty50 Index Reg Gr
61.3
0.55
14.03
2.18
–
ANGEL ONE Nifty50 INDEX FUND REG GR
36.03
0.2
–
–
–
Mirae Asset Nifty50 Index Fund Reg Gr
31.92
0.14
14.09
–
–
Kotak Nifty50 Equal Weight Index Fund Reg Gr
19.90
0.22
16.65
–
–
Bajaj Finserv Nifty50 Index Fund Reg Gr
8.21
0.9
–
–
–
(As of 08th October 2025)
While most Nifty50 index funds deliver very similar returns, the real difference lies in their expense ratios and fund sizes—so it’s wise to pick one that balances low costs with strong credibility.
How does the Nifty50 Index Fund Work?
The Nifty50 Index Fund works on the principle of replication. As it is a passively managed fund, the fund manager does not actively choose the stock; instead, it decides to invest the fund accumulated from the investor into the exact stocks of the Nifty50 Index in the same weightage.
The key benefit of investing in the Nifty50 Index Fund is as follows:
Diversification: An investor can easily diversify their portfolio by investing in only one fund.
Economical: As index funds are passively managed funds, their expense ratio is comparatively much lower than any other actively managed fund.
Low Risk: The portfolio of the Nifty50 Index Fund consists of the top 50 companies listed on the stock exchange; therefore, they are less volatile as the investments are made in fundamentally strong companies.
Rebalancing: As the Nifty50 index is balanced periodically, this saves the time and effort of monitoring the portfolio.
Risk of Investing in the Nifty50 Index Fund
The major risks involved while investing in Nifty50 Index Funds are as follows:
Market Risk: As the capital of investors is invested in the top 50 companies, the underperformance of the stock market can significantly impact the overall return of Nifty50 Index Funds.
Tracking Error: The Nifty50 Index Fund’s returns may not be the same as the Nifty50 Index’s returns because of tracking error. This can happen because of the fund manager’s cash reserves, the expense ratio, and delays in reinvesting dividends.
Limited Return: These funds post returns similar to the Nifty50 Index, as they are passively managed and do not claim to outperform the index. Therefore, it is suitable only for conservative investors.
Factors to Consider Before Investing in the Nifty50 Index Fund
The key factors which one must consider before investing in the Nifty50 Index Fund:
Investment Horizon: The typical investment horizon for the Nifty50 Index Fund is more than five years. Hence, one should consider its investment horizon as a key parameter before investing in the Nifty50 Index Fund.
Expense Ratio: The expense ratio is a key factor which can impact the returns of the Nifty50 Index Fund. Hence, one should opt for the fund which has the lowest expense ratio.
Risk Appetite: As the Nifty50 Index fund invests in the shares of the top 50 companies. And they are volatile, hence they can show volatility in your portfolio. Therefore, if you can handle the fluctuation in your portfolio, then only consider investing in it.
Investment in the Nifty50 Index Fund is suitable for the following investors:
Minimum Cost: Investment in the Nifty50 Index Fund is suitable for investors who want to pay a minimum cost for their investment. As the Nifty50 Index Fund is passively managed, and has a minimum cost.
Risk Averse: The Nifty50 Index Fund is a good choice for an investor who wants to make more money by investing in stocks but also wants a safer option.
Long-term investor: Investors who generally have an investment horizon of more than five years can invest in the Nifty50 Index Fund.
Difference Between Nifty50 and Nifty50 TRI
The key differences between Nifty50 and Nifty50 TRI are as follows:
Particular
Nifty50
Nifty50 TRI
Meaning
It only includes the prices of the top 50 companies listed on Nifty.
Along with the prices, it also includes dividends distributed by those 50 companies.
Accuracy
As compared to the Nifty50 TRI Index, it is less accurate, as it does not include dividends.
It has high accuracy as it includes dividends.
Benchmark
It is rarely used as a benchmark by funds.
Nifty50 TRI is commonly used as a benchmark by almost all funds.
Dividends
It ignores the dividends distributed by companies.
It includes all the dividends distributed by the companies.
On a concluding note, A Nifty50 Index Fund is one of the easiest ways to start investing to allocate your money across India’s top 50 companies. A lot of investors like it because it’s low-cost, well-diversified, and not as volatile as funds that are actively managed. This means you should still pay attention to elements like the expense ratio and tracking error before you invest. Therefore, we suggest that you consult your investment advisor before making any investment decision in the Nifty50 Index Fund.
S.NO.
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A Nifty50 Index Fund is a type of mutual fund that follows the Nifty50. It puts money into the 50 biggest companies on the index (by market cap).
What makes Nifty50 different from Nifty50 TRI?
Nifty50 only shows changes in stock prices, but Nifty50 TRI (Total Return Index) also takes into account dividends paid by those companies.
What does the acronym TRI mean?
TRI stands for the Total Return Index (TRI). It includes both price changes and dividends.
What is Tracking Error in a fund?
The difference between an index fund’s return and the benchmark index is called the tracking error. It usually happens because of costs, cash flow, and other things.
Do Nifty50 Index Funds actively manage their investments or not?
These are passive funds. The fund manager doesn’t choose stocks; they just follow the index in the same way.
If you want to start investing wisely in 2025, index funds can be an excellent option for you, especially if you are searching for the best index funds in India that offer stable and low-cost diversification. The demand for the top index funds in India is constantly growing today because these funds offer exposure to the entire market at a low cost and have the potential to deliver stable returns in the long term. Recently, SEBI has further tightened transparency related to tracking error and tracking difference, making it easier for investors to choose the right fund. In this blog, we will explore which top index funds in India are best in 2025 and how to choose them wisely.
What Are Index Funds and How Do They Work?
An index fund is a type of mutual fund that replicates the performance of a market index, such as the Nifty 50 or Sensex. This means the fund invests in the same companies included in that index and in the same proportions. Its goal is not to outperform the market, but to track its performance.
How Index Funds Work?
Investing in this fund means your money is invested in all the companies included in that index. The fund manager doesn’t select individual stocks; they simply update the portfolio when the index changes. This is why these funds have lower costs and their returns closely track the index.
10 Best Index Funds in India 2026
Below is a curated list of the best index funds in India that have shown strong consistency and long-term potential :
S.No
Fund Name
Current NAV
AMU(Cr.)
3Y Return Annualised (%)
Expense Ratio (%)
1
Motilal Oswal Nifty Midcap 150 Index Fund
₹38.10
₹2631
22.50%
0.26%
2
Nippon India Nifty Smallcap 250 Index Fund
₹33.13
₹2563
21.68%
0.35%
3
Nippon India Nifty Midcap 150 Index Fund
₹25.78
₹2030
23.47%
0.30%
4
DSP NIFTY Next 50 Index Fund
₹26.98
₹1135
17.96%
0.28%
5
Motilal Oswal Nifty Smallcap 250 Index Fund
₹38.17
₹1042
22.08%
0.33%
6
Kotak Nifty Next 50 Index Fund
₹20.37
₹809
17.74%
0.10%
7
Nippon India Nifty Next 50 Junior BeES FoF
₹26.26
₹631
17.78%
0.12%
8
ICICI Prudential Nifty Smallcap 250 Index Fund
₹17.34
₹571
21.92%
0.30%
9
Aditya Birla Sun Life Nifty Midcap 150 Index Fund
₹25.20
₹405
22.55%
0.44%
10
Aditya Birla Sun Life Nifty Smallcap 50 Index Fund
The Motilal Oswal Nifty Midcap 150 Index Fund is a good option for those looking to invest in mid-cap companies. This fund tracks the Nifty Midcap 150 Index, which comprises 150 strong and emerging companies in India. The fund’s portfolio is quite diversified and includes well-known companies such as BSE Ltd., Hero MotoCorp, Dixon Technologies, Suzlon Energy, PB Fintech, HDFC AMC, Coforge, Cummins India, Persistent Systems, and Fortis Healthcare. Motilal Oswal AMC was established on November 14, 2008, and today manages total assets of approximately ₹92.51 lakh crore. This fund is suitable for investors seeking stable and balanced returns over the long term without taking on excessive risk.
Fund Performance
Parameters
Value
Alpha
0.07%
Beta
1.00
Sharpe Ratio
1.03
P/E
32.22
(as on 31st October, 2025)
2. Nippon India Nifty Smallcap 250 Index Fund
The Nippon India Nifty Smallcap 250 Index Fund is a good option for investors looking to invest in small-cap companies. This fund tracks the Nifty Smallcap 250 Index, which comprises 250 emerging Indian companies that have the potential for rapid growth in the future. Its portfolio includes companies like Multi Commodity Exchange, Laurus Labs, CDSL, Delhivery, Radico Khaitan, and Kaynes Technology, all of which hold strong positions in their respective sectors. This fund is managed by Himanshu Mange and is operated by Nippon India Mutual Fund. This AMC has been operating since February 24, 1995, and manages assets worth approximately ₹573.67 lakh crore. This fund is suitable for investors who are seeking growth in small-cap stocks and are willing to take on a moderate level of risk.
Fund Performance
Parameters
Value
Alpha
-0.13%
Beta
1.02
Sharpe Ratio
0.83
P/E
34.23
(as on 30th September, 2025)
3. Nippon India Nifty Midcap 150 Index Fund
The Nippon India Nifty Midcap 150 Index Fund is designed for investors who want to participate in the growth of the mid-cap segment. This fund tracks the Nifty Midcap 150 Index and invests in 150 emerging Indian companies that have the potential to become large-cap companies in the future. Its portfolio includes companies such as BSE Ltd., Hero MotoCorp, Dixon Technologies, Suzlon Energy, PB Fintech, HDFC AMC, Coforge, Cummins India, Persistent Systems, and Fortis Healthcare. The fund is managed by Himanshu Mange and is offered by Nippon India Mutual Fund. This AMC has been active since February 24, 1995, and currently manages assets worth approximately ₹573.67 lakh crore. The fund is known for its low costs and stable returns.
Fund Performance
Parameters
Value
Alpha
-0.14%
Beta
0.99
Sharpe Ratio
1.01
P/E
32.17
(as on 30th September, 2025)
4. DSP Nifty Next 50 Index Fund
The DSP Nifty Next 50 Index Fund is an excellent fund for those who want to invest in the next line of companies after the large-cap companies. This fund tracks the Nifty Next 50 Index, which includes several strong and growing companies. Its portfolio includes companies like Hindustan Aeronautics, TVS Motor, Vedanta, Divi’s Labs, Britannia, Tata Power, Avenue Supermarts, and Indian Hotels, all of which are performing well in their respective sectors.
This fund is managed by Anil Ghelani and is operated by DSP Mutual Fund. The company has been operating since May 13, 1996, and manages assets worth approximately ₹192.79 lakh crore. This fund is a good option for those who are willing to take a moderate risk for stable returns.
Fund Performance
Parameters
Value
Alpha
0.88%
Beta
1.32
Sharpe Ratio
0.69
P/E
21.60
(as on 30th September, 2025)
5. Motilal Oswal Nifty Smallcap 250 Index Fund
The Motilal Oswal Nifty Smallcap 250 Index Fund is a straightforward and intelligent way to invest in small-cap companies. This fund tracks the Nifty Smallcap 250 Index, which includes companies with strong growth potential. Its portfolio includes companies like Multi Commodity Exchange, Laurus Labs, CDSL, Delhivery, and Radico Khaitan, which have consistently performed well in their respective sectors. The fund is managed by Swapnil P. Mayekar and is operated by Motilal Oswal AMC, which has been in operation since November 14, 2008. The company manages assets worth approximately ₹92.51 lakh crore. This fund is an excellent option for investors who want to benefit from the long-term growth potential of small-cap stocks.
Fund Performance
Parameters
Value
Alpha
0.21%
Beta
1.03
Sharpe Ratio
0.84
P/E
34.23
(as on 31st October, 2025)
6. Kotak Nifty Next 50 Index Fund
The Kotak Nifty Next 50 Index Fund is an excellent option for those who want to invest in companies that are next in line after the large-cap companies. This fund tracks the Nifty Next 50 Index, which comprises companies that have the potential to become part of the Nifty 50 in the future. The fund includes companies like Hindustan Aeronautics, TVS Motor, Vedanta, Divi’s Laboratories, Britannia, Tata Power, BPCL, and Indian Hotels, all of which have been consistently performing well. This fund is managed by Devender Singhal and is operated by Kotak Mutual Fund. The company has been operating since August 5, 1994, and manages assets worth approximately ₹492.72 lakh crore. This fund is a good option for investors who are looking for stable returns and are willing to take on a moderate level of risk.
Fund Performance
Parameters
Value
Alpha
0.88%
Beta
1.32
Sharpe Ratio
0.69
P/E
21.60
(as on 31st October, 2025)
7. Nippon India Nifty Next 50 Junior BeES FoF
Nippon India Nifty Next 50 Junior BeES FoF is an easy way for investors to gain exposure to the Nifty Next 50 Index without directly trading in the ETF. It is a Fund of Funds that invests almost entirely in the Nippon India ETF Nifty Next 50 Junior BeES. This provides investors with exposure to the next tier of growth companies within the large-cap segment. The majority of its assets are held in the ETF, with a small portion in TREPS (Tri-Party Repo) to maintain liquidity. The fund is managed by Himanshu Mange and operated by Nippon India Mutual Fund. This fund house has been operating since February 24, 1995, and manages assets worth ₹573.67 lakh crore. Its low expense ratio and simple structure make it an easy way to invest in the Next 50 index.
Fund Performance
Parameters
Value
Alpha
1.18%
Beta
1.30
Sharpe Ratio
0.70
P/E
21.79
(as on 30th September, 2025)
8. ICICI Prudential Nifty Smallcap 250 Index Fund
The ICICI Prudential Nifty Smallcap 250 Index Fund is designed for investors looking for long-term investment opportunities in small-cap stocks. This fund tracks the Nifty Smallcap 250 Index and invests in companies that are leaders in their respective sectors. Its portfolio includes companies such as Multi Commodity Exchange, Laurus Labs, CDSL, Delhivery, Radico Khaitan, and Kaynes Technology, which are steadily building a strong market position. The fund is managed by Nishit Patel and operated by ICICI Prudential AMC, which has been in operation since June 22, 1993. The company manages assets worth approximately ₹908.28 lakh crore. This fund is considered a stable and low-cost option in the small-cap segment.
Fund Performance
Parameters
Value
Alpha
-0.01%
Beta
1.02
Sharpe Ratio
0.83
P/E
34.23
(as on 30th September, 2025)
9. Aditya Birla Sun Life Nifty Midcap 150 Index Fund
The Aditya Birla Sun Life Nifty Midcap 150 Index Fund is a good investment option in mid-cap companies, suitable for investors seeking long-term growth. This fund tracks the Nifty Midcap 150 Index and invests in 150 strong and emerging companies in India. Its portfolio includes companies such as BSE Ltd., Hero MotoCorp, Dixon Technologies, Suzlon Energy, PB Fintech, HDFC AMC, Coforge, Cummins India, Persistent Systems, and Fortis Healthcare. The fund is managed by Priya Sridhar, while it is administered by Aditya Birla Sun Life AMC, which has been active since September 5, 1994, and manages assets worth ₹385 lakh crore
Fund Performance
Parameters
Value
Alpha
-0.04%
Beta
1.00
Sharpe Ratio
1.02
P/E
32.22
(as on 30th September, 2025)
10. Aditya Birla Sun Life Nifty Smallcap 50 Index Fund
The Aditya Birla Sun Life Nifty Smallcap 50 Index Fund is a good option for investors who want to invest in small but fast-growing companies. This fund tracks the Nifty Smallcap 50 Index and invests in 50 emerging Indian companies that have the potential for strong future growth. Its portfolio includes companies such as Multi Commodity Exchange, Laurus Labs, CDSL, Delhivery, Radico Khaitan, Kaynes Technology, Karur Vysya Bank, Crompton Greaves, Cholamandalam Financial Holdings, and CAMS. All of these companies are growing rapidly in their respective sectors and exhibit strong fundamentals. This fund is managed by Priya Sridhar and is operated by Aditya Birla Sun Life AMC, which was established on September 5, 1994. The company has assets under management of approximately ₹385 lakh crore. This fund is considered suitable for investors who are comfortable with the risks associated with growth investing in the small-cap segment.
Choosing the best index fund becomes easier when you focus on a few proven factors :
Choosing the Index : First, decide which index you want to invest in Nifty 50, Nifty Next 50, or Nifty 500. If you are investing for the first time, the Nifty 50 is considered the best starting point as it covers large and stable companies.
Expense Ratio : The advantage of an index fund lies in its low cost. Always choose a fund with an expense ratio of 0.20% or less, so that it doesn’t significantly impact your returns in the long run.
Tracking Difference : Check how closely the fund’s return matches its index. If the difference is too large, the fund is not accurately tracking the index. Try to choose a fund that has consistently maintained a low tracking difference.
Fund Size (AUM) : Funds with a large AUM (Assets Under Management) are generally more reliable because they tend to have lower costs and better tracking. It’s wise to avoid very small funds.
Replication Method : Check whether the fund uses full replication or sampling. Funds that use full replication accurately track the entire index and usually deliver more precise results.
Common Mistakes to Avoid While Investing in Index Funds
Relying solely on past returns : Many investors select funds based solely on their past performance. However, with index funds, it’s crucial to consider the tracking difference and expenses (TER), as future returns depend on these factors.
Holding multiple funds tracking the same index : Sometimes, people buy different funds that track the same index. Doing so doesn’t provide any additional benefit; instead, it complicates the portfolio.
Ignoring tracking difference and AUM : If a fund has a small AUM or a high tracking difference, it can impact returns. Always check these two factors.
Frequently switching funds : The benefits of index funds are realized only when you maintain your investment for the long term. Frequently switching funds increases costs and reduces returns.
If you want to invest in the stock market without taking on too much risk, the best index funds in India offer a simple and dependable way to get started.. They allow you to invest in the entire market at once, and at a low cost. Just choose the right fund, be patient, and give your investment time to grow. In the long run, this small step can become a source of strong and reliable returns for you. In the long run, selecting the best index funds and staying invested can build strong and reliable wealth.
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When it comes to investing in mutual funds, you will find multiple options at once. Each of these options offers you a different risk and return ratio. At the same time, the asset allocation for these funds differs as well. While some focus on equity or debt, there are a few funds that invest in both assets to offer a better balance.
But there are two types of funds that are usually considered more if you are looking for stable returns. These are the mid-cap and large-cap funds. Though both these invest in the equity, there are certain differences between them that you must know.
So, if you are new to investing and looking to know the details, then read this guide. Explore the mid-cap vs large-cap details and understand which of these is a better choice of investment for you.
What Is a Large-Cap Fund?
A large-cap fund is a type of equity mutual fund. It is the one that invests primarily in companies with a large market capitalization. These are the top 100 companies that are listed on the stock exchange. The main reason for the selection of these companies is their history and strong performance.
These companies have a proven record of performance, which makes them a better choice. But at the same time, these are the ones that have reached the top, hence at times you will find less potential for growth.
Key Features of Large Cap Funds
Stable Returns: The fund mainly focuses on the financially sound companies. This ensures that the investors get a steady long-term growth potential.
Lower Volatility: Most of the companies in the large-cap segment are not affected by market fluctuations. This makes them a safer choice when compared to mid and small-cap funds.
High Liquidity: Shares of large-cap companies are actively traded. This ensures that the trader can enter or exit the market easily at any time with no hassle.
Consistent Dividends: Many large-cap companies offer regular dividends. This is an additional income to the profits that the investors make.
Suitable for Long-Term Investors: These funds are better for those who invest for a long time. These funds offer stability and have comparatively low risk. Hence, if you invest with the aim of wealth creation, these are better.
SEBI Guideline: The large-cap funds must invest at least 80% of their assets in the top 100 companies by market capitalization.
What Is a Mid-Cap Fund?
A mid-cap fund is another type of equity mutual fund. This is the fund that invests in medium-sized companies. Now, if you see, these are the next best set of companies. As per market capitalization, they rank between 101 and 250 on the stock exchange.
These companies are still growing. They might be with the plans of expansion or with some innovative ideas. Hence, the potential is more. But at the same time, the risk is high as well. Any change in the market conditions can impact these companies greatly. This can lead to losses.
Key Features of Mid-Cap Funds
High Growth Potential: This is the fund that mainly invests in companies that are in their growing stage. This is why the fund can deliver higher returns over time.
Moderate to High Risk: Mid-cap stocks can fluctuate more. This can be due to market sentiment and business performance. This increases the overall risk associated with the investment.
Diversified Portfolio: Investing in these funds helps the investors benefit from exposure. This is mainly across emerging industries and sectors, which can be great.
Ideal for Long-Term Goals: These funds work best for investors with a longer investment horizon. The risk is high and so it is not good for conservative investors.
SEBI Mandate: Mid-cap funds are required to invest at least 65% of their assets in companies ranked from 101 to 250 by market capitalization.
When investing in the large-cap funds, you focus on long-term growth and low risk. But there are other pros and cons to know. These are as follows:
Pros of Large Cap Funds
Companies with a proven record and performance are included.
Good for offering steady and reliable returns.
Considered to be the funds with low risk involved.
They are very liquid, which makes entry and exit simpler.
Better for conservative and long-term investors.
Cons of Large Cap Funds
Moderate returns as compared to other funds.
Growth potential is limited and low.
Performance may slow down during market rallies led by smaller stocks.
Pros and Cons of Mid-Cap Funds
Just like any other fund, investing in mid-cap funds also comes with certain risks and challenges. Knowing them can help you make the right investment call and ensure that you make good profits. So, here are the top ones to know.
Pros of Mid-Cap Funds
High growth potential based on future plans.
Allows for earning a higher rate of returns in a bullish market.
Provides for better diversification.
Chance to invest in innovative schemes and ideas.
Good option for investors seeking capital appreciation over time.
Cons for Mid Cap Funds
Quite volatile and risky in nature.
Recovery in case of a downturn is long.
Liquidity can be lower as mid-cap stocks are less frequently traded.
Now that you know what the large-cap and mid-cap funds are, the next step is to find the difference. Knowing the difference will ensure that your investment calls are based on proper understanding and analysis.
So, here is the large-cap vs mid-cap difference that you should know.
Basis
Large Cap Funds
Mid Cap Funds
Market Capitalization
Invest in the top 100 companies with large market capitalization
Invest in companies ranked 101 to 250 by market capitalization
Risk Level
Lower risk due to stable and established businesses
Moderate to high risk as companies are still in the growth phase
Return Potential
Offer steady but moderate returns
Can deliver higher returns during favorable market conditions
Volatility
Less volatile and more stable during any downturns
More volatile and sensitive to market movements
Liquidity
High liquidity, as large-cap stocks are actively traded
Moderate liquidity since mid-cap stocks are less traded
Investment Horizon
Ideal for long-term investors seeking stability
Suitable for long term investors with a higher risk appetite
Suitable For
Conservative investors looking for steady growth
Aggressive investors aiming for higher capital appreciation
Which Is Better – Large Cap or Mid Cap Fund?
When it comes to selecting between the large-cap and mid-cap funds, there are various factors that you need to consider. Of these, the key ones include:
Profit potential
Patience of the investor
Risk taking capacity
So, if the investor prefers stability and low risk, then the large-cap is a better choice. The growth would be slow, but there will be stability. But if you prefer faster growth with moderate high risk, then you can go for the mid-cap funds as well. There will be fluctuations, and so it will require better monitoring as well.
In short:
Choose large-cap funds for safety and stability.
Choose mid-cap funds for growth and higher return potential.
Both large-cap and mid-cap funds are a great choice for investment. Where one offers you stability, the other gives you speedy growth. But when it comes to selecting anyone, it will be based on the choice of the investor themselves.
But if you are new to investing and are looking to develop a balanced portfolio, then ensure to include both. You must be wondering why? Well, combining both will offer you moderate risk and moderate returns. Where one will help you with wealth creation, the other will guide you to faster results.
But yes, as said before, it is important that you start right and with expert guidance. This is where you can opt for Pocketful. Open your account today. Get expert support as you need. Ensure you make the right investments through your journey.
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A large-cap fund invests mainly in the top 100 companies with high market capitalization. It offers low risk and stable returns.
Which is safer, large cap or a mid-cap fund?
When you compare the two, the risk associated with large-caps is less. Hence, these are safer during all market conditions.
Can I invest in both large-cap and mid-cap funds?
Yes, combining both can balance risk and reward. You can benefit from the stability of large-cap funds and the growth of mid-cap funds at the same time.
Who should invest in mid-cap funds?
Mid-cap is good for growth-seeking investors. They are ready to take moderate risks. Also, they are the ones looking for high returns.
How long should I stay invested in large-cap funds?
If you are looking for a good return, then you must stay invested for 3-5 years minimum in large-cap funds.
We all want our money to grow faster, don’t we? That is exactly why high-return mutual funds get so much attraction. They kind of give long-term growth that can move the needle for your financial goals, whether it is building wealth, saving for a house, or planning an early retirement.
Mutual funds, especially equity-based ones, have become one of the most popular ways for Indians to invest and grow their money over time. But here is the truth: not every fund performs equally well. Some manage to consistently outperform the market, while others fall short. In this blog, we will look at some of the best high-return mutual funds in India for 2025, understand what makes them move, and talk about how to pick the right ones for your goals.
What are High Return Mutual Funds?
High-return mutual funds are funds that have performed better than the market or have given higher-than-average returns over the years. But before getting an adrenaline rush from those big numbers, it is worth taking a closer look at what is really driving them. Most high-return mutual funds invest mainly in equities; in simple terms, they put your money into stocks of different companies. Stocks have the potential to grow much faster than traditional options like fixed deposits or bonds, especially if you stay invested for the long term. That is what makes them attractive for wealth creation.
But those higher returns do not come for free. Equity markets can be unpredictable, and prices move up and down all the time. So, while these funds can help your money grow faster, you also have to be comfortable with a bit of short-term volatility.
Let us have a glimpse at the types of mutual funds that often offer higher returns:
Large Cap Funds – Invest in big, well-known companies. They are relatively stable and great for long-term investors who want stable growth.
Mid Cap Funds – Invest money into mid-sized companies with strong growth potential. They create a good balance between risk and reward.
Small Cap Funds – Focus on smaller, emerging businesses. These can give you impressive returns, but only if you are comfortable with short-term ups and downs.
Sectoral or Thematic Funds – These target specific industries like technology, manufacturing, or infrastructure. When a sector does well, these funds can rise, but they can also fall quickly if trends change.
Flexi Cap or Multi Cap Funds – These invest across large, mid, and small-cap stocks, giving fund managers the freedom to chase opportunities during different market dynamics.
List of the Top 10 High-Return Mutual Funds in India
S. No
Funds
5 Yr Returns (%)
Expense Ratio (%)
Launch
Net Assets (Cr)
1
ICICI Prudential Infrastructure Fund
36.19
1.14
2005-08-31
8,231
2
HDFC Infrastructure Fund – Regular Plan
34.02
1.13
2008-03-10
2,585
3
Aditya Birla Sun Life PSU Equity Fund – Regular Plan
Every time you invest, it is important to pause and take a closer look because you will be putting in your hard-earned money. Below are a few simple points to keep in mind;
1. Risk and Return Go Hand in Hand
The promise of high returns is undoubtedly tempting, but remember, there is no free lunch in investing. Funds that can give big returns also tend to fluctuate more. Small-cap or sector funds, for example, can perform well in a bull market but may drop sharply when markets fall.
2. Look for Consistency
Anyone can have a lucky streak. Instead of getting carried away by one or two strong years, check how the fund has performed over 3, 5, or even 10 years. A good fund stays strong across different market conditions
3. The Fund Manager Matters
Think of the fund manager as the loco-pilot of your financial train. Their experience, strategy, and discipline play a big role in how well you are driven to your destination. Look for managers with a stable track record and a long-term approach.
4. Watch the Expense Ratio
Every mutual fund charges a small fee to manage your money, which is called the expense ratio. A slightly higher fee might not seem like a concern now, but over the years, it can quietly eat into your returns.
5. Time Is Your Best Friend
Equity mutual funds need time to show their growth. If you can stay invested for at least 5-7 years, you will give your money a chance to grow and recover from short-term market swings.
Ask yourself why you are investing in the first place. Are you saving for long-term wealth, retirement, or a down payment on a house? Once you know that, it becomes easier to pick a fund type that aligns with your purpose.
2. Know How Much Risk You Can Handle
Be honest here. If market swings make you anxious, large-cap or flexi-cap funds are safer bets. But if you do not mind some short-term ups and downs, mid- and small-cap funds can work well for you.
3. Look at the Fund’s Track Record
Don’t fall for last year’s best performers. Check how the fund has done over 3, 5, and 10 years. A good fund gives steady results across different market phases.
4. SIPs Are a Great Place to Start
If you are unsure about timing the market, go with a Systematic Investment Plan (SIP). It is one of the easiest ways to invest regularly, reduce volatility, and slowly build wealth over time.
Just because a fund did great last year does not mean it will repeat that performance. Markets change, and so do trends. Your focus should be on consistency
2. Ignoring Risk
Do not choose a fund just because it gives big returns. If you are not comfortable with volatility, you might panic during market dips and sell at the wrong time
3. Switching Too Often
Jumping from one fund to another hurts your returns and stops compounding from doing its magic. Stick with your plan unless there is a reason to switch.
4. Not Reviewing Your Investments
You do not need to track your funds daily, but reviewing them once or twice a year helps. Make sure they are still aligned with your goals and performing close to their benchmarks, since your goals can also change with time.
5. Lack of Diversification
Putting all your money in one type of fund, say, all small-caps or all thematic funds, can backfire. Mix it up with a blend of large, mid, and small-cap funds to balance growth and stability.
Conclusion
High-return mutual funds can be a good option for building long-term wealth, but they are not magic. The truth is, the higher the possible returns, the more patience and discipline they demand. It is alluring to run after the top-performing fund of the moment, but the concept is to find one that fits your goals, risk level, and time frame. Start small, stay consistent, and let compounding play the game while you sit back and relax. SIPs are a great way to get started since they give you the benefit of rupee cost averaging. And most importantly, give your investments time; that is where the real growth happens.
Remember, investing is not about getting lucky. It is about being calm and steady. If you stay the course, the markets will surely reward you with returns.
S.NO.
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Which mutual fund gives the highest return in India?
There is no single “best” fund for everyone. Small-cap and mid-cap funds often deliver higher returns, but as we know, high returns come with high risk. The right choice depends on your goals and time horizon,
Are high-return mutual funds risky?
A little, yes, most of them invest in stocks, so market ups and downs will affect them.
How long should I stay invested in a mutual fund?
It is suggested to invest for at least 5 to 7 years. That gives your money enough time to grow and recover from market dips while enjoying the benefit of compounding
Can I invest in high-return funds through SIPs?
Yes, SIPs are one of the smartest ways to invest. They help you stay disciplined and reduce the stress of timing the market.
How many mutual funds should I have?
You do not need a dozen of them. A mix of good funds across categories like large-cap, mid-cap, and flexi-cap is usually enough.
India’s defense budget increased rapidly in 2025 and this is why defense sector mutual funds have become a big topic of discussion among investors today. If you want to know which is the best defense mutual fund or what is the complete defense mutual fund list, then this guide is for you. Here we will understand how mutual funds investing in the defense sector can bring long-term strength to your portfolio and why mutual funds in the defense sector are being considered as an emerging opportunity nowadays.
What are Defence Sector Mutual Funds?
Defence Sector Mutual Funds are mutual funds that invest primarily in defence and related industries. These include companies involved in aerospace, weapon manufacturing, engineering, electronics and defence equipment. In simple terms, these are mutual funds investing in the defence sector that directly bet on companies whose business is related to defence.
These funds fall under the category of sectoral/thematic funds, which is recognized by SEBI (Securities and Exchange Board of India). This means that their investment is focused on a single sector, while diversified equity funds invest in many different industries. The main objective of these funds is to take advantage of the long-term opportunities provided by India’s growing defence needs and the Atmanirbhar Bharat initiative. It is important to note that since these are mutual funds in the defence sector, they also carry higher risk, and investors should always consider these funds from a long-term perspective.
Defence Sector Mutual Funds List 2026
Fund Name
Current Nav
AUM
6M Returns
1 year Return
Motilal Oswal Nifty India Defence Index Fund
₹ 10.25
₹3,703.3 Cr
27.23%
19.49%
HDFC Defence Fund
₹ 24.38
₹7,024.99 Cr
26.18%
11.67%
Aditya Birla Sun Life Nifty India Defence Index Fund
₹ 11.41
₹721.82 Cr
27.01%
18.97%
Groww Nifty India Defence ETF FoF Direct Growth
₹ 11.70
₹78.84 Cr
26.38%
16.95
(Data as on 15-10-2025)
1. Motilal Oswal Nifty India Defence Index Fund
This fund invests in leading companies in India’s defence sector. Its minimum SIP starts from ₹500 and the fund manager is Swapnil P Mayekar. The top holdings of this fund include Bharat Electronics Ltd. (20.6%), Hindustan Aeronautics Ltd. (20.46%), Solar Industries India Ltd. (11.54%), Bharat Forge Ltd. (11.50%), and Mazagon Dock Shipbuilders Ltd. (7.46%). Due to the strong growth of the defence industry and government support, this fund can be a good option for long-term investors.
2. HDFC Defence Fund
HDFC Defence Fund is managed by Priya Ranjan and it invests directly in defence and related capital goods companies. The fund’s key holdings includeBharat Electronics Ltd. (18.88%), Hindustan Aeronautics Ltd. (15.21%), Solar Industries India Ltd. (11.67%), Bharat Forge Ltd. (9.58%), and BEML Ltd. (8.83%). Apart from this, companies like Bharat Forge and Premier Explosives are also part of the portfolio. This fund is an ideal choice to capture direct growth of the defense sector.
3. Aditya Birla Sun Life Nifty India Defence Index Fund
This fund also focuses on defense sector companies and is managed by Priya Sridhar. The minimum SIP starts from ₹500. Bharat Electronics Ltd. (21.24%), Hindustan Aeronautics Ltd. (21.10%), Solar Industries India Ltd. (14.83%), Mazagon Dock Shipbuilders Ltd. (8.72%), and Cochin Shipyard Ltd. (6.01%). This fund covers key stocks in the defense industry and is a better option for investors looking for index-based options.
4. Groww Nifty India Defence ETF FoF Direct Growth
This fund is managed by Akash Chauhan and its SIP starts from just ₹500. This fund invests 100% in Groww Nifty India Defence ETF, i.e. it directly tracks the performance of the defense sector index. Investors who do not want to invest directly in ETFs can take advantage of the growth of the defense sector through this fund of funds (FoF). This is a new and simple option, especially for beginner investors.
Why Defence Sector Mutual Funds are Gaining Popularity
India’s Defence Investments at an all-time high : The Union Budget 2025–26 has allocated ₹6.81 lakh crore for the Defence sector, an increase of about 9.5% from last year and accounting for about 13.5% of the total budget. This huge investment has made defence sector mutual funds an attractive option.
Make in India + Export Expansion : India recorded an 18% growth in defence production in 2024–25, reaching ₹1.50 lakh crore. Also, defence exports reached ₹23,622 crore, a 12% year-on-year growth with the private sector contributing ₹15,233 crore. This provides a strong foundation for the “Make in India” and “mutual funds investing in defence sector” themes.
Geopolitical tensions and global demand : International conditions and security challenges have accelerated the pace of warfare technology and defence production. For example, manufacturers such as Solar Group are increasing production of 155 mm ammunition amid the Russia–Ukraine conflict.
Good performance of defense companies in the stock market : Hindustan Aeronautics Limited (HAL), Bharat Electronics Ltd (BEL), Bharat Forge and other defense companies have performed well in recent years, which is a positive sign for investors looking for the best defense mutual fund.
Advantages of Investing in Defence Sector Mutual Funds
The government’s Make in India initiative, growing defence exports, and cutting-edge technology innovations have made it attractive for investors in the long run. At such a time, investing in defence sector mutual funds can prove to be a wise move. These funds not only provide an opportunity to invest in companies that contribute to national security, but also strengthen investors’ portfolios.
Strong growth potential : India’s defence budget is constantly increasing and with it, new deals and projects are increasing in the industry. For example, companies like Hindustan Aeronautics, Bharat Electronics and Solar Industries are expanding rapidly. By investing in these funds, you can directly benefit from the growth of this sector.
Stable investment for the long term : The defence sector is not a short-term investment theme. This sector will grow in the long run, as there is continued government and private investment. Such funds provide investors with an opportunity for stable and long-term returns.
Diversification in portfolio : Through these funds, you can invest in both government (PSU) and private defense companies. This diversifies your investment and balances the risk.
Benefit from government policies and incentives : Increasing FDI limit by the government, promoting local manufacturing and giving policy incentives for the defense sector is continuously strengthening this sector. Investing in such an environment can prove to be beneficial in the long run.
Long term wealth creation : If investors stay patient for a long time, then these funds can give good capital appreciation and returns. Continuously increasing government and private investments strengthen the companies of this sector, giving long-term benefits to the investors.
Defence sector mutual funds are attractive, but it is important to understand the risks involved. If you want to invest in these funds, pay attention to the following five key aspects:
Risk of centralised investing : Defence funds often invest in just a few large companies, such as Hindustan Aeronautics and Bharat Electronics. If there is any instability in these companies, the entire fund can be affected. Therefore, it is important to understand that your money is concentrated on the entire sector, not individual industries.
Dependence on government policies : The defence industry is dependent on government policies and budgets. If the defence budget is reduced or new deals are delayed, the earnings of companies can be affected and your fund’s returns can also be low.
High valuation of stocks : Defence sector stocks have risen rapidly in the last few years. This means that their valuations (P/E or P/B) are high. In such a situation, future returns may be limited and prices may fall during market correction.
Global and geopolitical risks : The defense sector is affected by international events. Wars, agreements or international tensions can directly affect the orders and supply chain of companies. At such times, investors are likely to incur losses.
Investor advice : If you are a retail investor, invest only 5–10% of your portfolio in defense funds. Invest for the long term and be patient. This will balance the risk and increase the chances of getting better returns.
Defense sector mutual funds are a good option for those who want to earn good returns by investing for a long time. These funds invest primarily in large defense companies of India and strengthen the portfolio. Keep in mind, being a sector-focused investment, there are some risks and global events can have an impact.
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Silver has always had a special place in our lives, from family gifts to festive silver coins, but lately, it has been making headlines for a different reason. It is no longer just a glittery metal to own; it is gradually becoming a smart way to invest. With the rise of electric vehicles, solar panels, and new-age technologies, silver’s demand is increasing across the world.
The good news is that you do not need to buy physical silver to be part of this trend. Silver mutual funds let you invest in silver’s price movement, right from your phone or laptop.
In this blog, we will walk you through what silver mutual funds are, why they are becoming so popular, and the best ones to consider in India for 2026, along with a few simple points to look for before you invest.
What are Silver Mutual Funds?
Silver Mutual Funds are an easy way to invest in silver without buying or storing the metal for real. Instead of dealing with physical silver, these funds put your money into Silver Exchange Traded Funds (ETFs), which track the daily market price of silver in India.
So, when silver prices go up, the value of your investment rises too, and when they fall, your fund’s value may dip slightly. The big advantage is convenience, no worries about purity, safety, or storage. You get to benefit from silver’s price movements in a completely digital manner.
List of Best Silver Mutual Funds:
S. No
Funds
Minimum Investment
Expense Ratio (%)
Exit Load
6 Mth Ret (%)
1 Yr Ret (%)
1
Aditya Birla Sun Life Silver ETF FoF – Regular Plan
Before you decide to invest your money in silver mutual funds, you should quickly check these points mentioned below;
1. Prices Can Be Volatile
Silver prices move up and down quite a bit, they depend on global demand, industrial use, and even investor mood. There is no need to panic over short-term swings.
2. Returns Might Differ Slightly from Silver Prices
Since these funds invest in Silver ETFs, there can be a small difference between the actual price of silver and your fund’s return and this is called a tracking error.
3. Check the Expense Ratio
Every fund charges a small fee to manage your money. A lower expense ratio generally means more of your returns stay with you.
4. Think Long-Term
Silver is not about instant gains. Give your investment at least 3-5 years to even out the ups and downs.
5. Use It for Diversification
Silver works best as a small part of your portfolio, maybe 5 -10% to balance your exposure to equity and debt investments.
Silver mutual funds make it easy to add a bit of sparkle to your portfolio. As industries like electric vehicles, solar power, and electronics continue to grow, silver’s demand is only getting stronger day by day. However, silver prices can fluctuate depending on the global trends and supply. Think of it as a small but smart value addition. If you are looking for a simple, paperless way to benefit from silver’s long-term story, silver mutual funds are definitely worth a look in 2026.
S.NO.
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They are safe, but remember silver prices can fluctuate. It is best to stay invested for a few years and manage those price swings.
What is better, a Silver ETF or a Silver Mutual Fund?
If you have a Demat account and are comfortable with trading, a Silver ETF is a good option. On the other hand if you prefer investing through regular mutual fund platforms, a Silver Mutual Fund is easier.
How much do I need to start investing?
Not much, You can start with as little as ₹500 through a SIP.
Can silver replace gold in my portfolio?
Both asset classes have different roles. It is better to own a bit of both for a balance.
How long should I stay invested?
Try for at least 3 to 5 years. Silver can be unpredictable in the short term, but over time, it generally gives better stability and growth.
The number of people investing in mutual funds in India is growing rapidly. By June 2025, the country’s total Assets Under Management (AUM) had reached approximately ₹74.41 lakh crore, reflecting the increasing confidence of investors. However, many people still choose funds based solely on returns. The truly smart approach is to compare each fund based on its performance, risk, and expenses. In this blog, we will learn how to properly compare mutual funds to make your investments better and safer.
Step 1–Define Your Investment Objective and Time Horizon
Choosing a mutual fund starts here. Often, we jump straight to “Which fund is performing well?”, but the real question is what are your investment goals and what is your investment horizon?
The right fund for you depends on these two factors:
Short-term goals (1 to 3 years) : If you are preparing for a major expense in the next few years such as a wedding, a trip, or building an emergency fund then Debt or Liquid Funds are generally better. These funds are not significantly affected by market fluctuations and provide stable returns.
Medium-term goals (3 to 5 years) : For investors who want to invest for 3-5 years, Hybrid or Balanced Advantage Funds are considered good options. They contain both equity and debt, which helps control risk while providing decent returns.
Long-term goals (5 years or more) : If your objective is long-term such as retirement planning, children’s education, or wealth creation then Equity Funds, Index Funds, or Flexi Cap Funds are good choices.
Step 2 – Compare Funds Within the Same Category
Whenever you compare mutual funds, the first thing to check is the category to which the fund belongs. Every fund has its own investment strategy: some invest in the stock market, some in bonds, and some in a mix of both. If you compare them all together, the results can be misleading.
Understanding SEBI’s Fund Categories
SEBI has categorized mutual funds into several main categories for the convenience of investors:
Equity Funds: These invest in the shares of companies and aim for long-term growth.
Debt Funds: These invest in government bonds, corporate debentures, and fixed-income securities.
Hybrid Funds: These invest in both equity and debt to try and provide balanced returns.
Solution-Oriented or Index Funds: These track a specific goal (such as retirement or child education) or an index (such as the Nifty 50).
Other Schemes: This category includes funds that don’t fit into the main equity, debt, or hybrid categories, often offering unique investment opportunities. Examples: Index Funds/ETFs, Fund of Funds (FoFs).
Commodity Funds:These funds invest in commodities like gold, silver, or other natural resources, often through ETFs. They provide a hedge against inflation and diversification beyond traditional asset classes. Examples:Gold ETF, Silver ETF, Multi-Commodity Fund.
International or Overseas Funds: These invest in foreign markets, giving Indian investors access to global companies and economies. They can be a good diversification tool but carry currency and geopolitical risks. Examples: Global Equity Fund, US-focused Fund, Emerging Market Fund.
There are also several types within Equity Funds
Equity funds are further categorized based on their size and strategy
Large Cap Funds: These invest in large companies like Reliance, HDFC Bank, Infosys, etc.
Mid Cap Funds: These invest in medium-sized companies, where the potential for growth is higher.
Small Cap Funds: These invest in small companies that can offer high returns, but also carry higher risk.
Sectoral/Thematic Funds: These focus on a single sector such as FMCG, Pharma, or IT.
The Right Way to Compare :
When you compare a fund, always compare it with funds from the same category.
For example, Axis Bluechip Fund can be compared with ICICI Prudential Bluechip Fund because both fall under the Large Cap category. But comparing Axis Bluechip Fund with HDFC Small Cap Fund would be an incorrect comparison because both have different investment strategies and risk levels.
Why is this step important ?
Each category has a different objective and risk profile.The objective of Equity Funds is to grow capital over the long term, while the goal of Debt Funds is to provide stable and secure returns. Comparing the two makes no sense. Therefore, always follow the rule of “compare within the same category.” This will allow you to accurately understand the fund’s true performance, stability, and value.
When comparing mutual funds, most investors initially look at returns, but making a decision based on last year’s performance isn’t the right approach. True wisdom lies in understanding a fund’s ability to perform consistently, not just its performance at a single point in time.
Focus on 3, 5, and 10-Year Returns : The true picture of any fund emerges when you look at its average returns (CAGR) over different periods such as 3 years, 5 years, and 10 years. This shows you how the fund has performed over the long term and whether it has maintained stability through market fluctuations.
Consider Rolling Returns : Point-to-point returns can sometimes be misleading, as they only show results based on a fixed date. Instead, look at rolling returns—these indicate how a fund has performed on average over various time periods. This metric is more reliable because it includes both good and bad market cycles.
Don’t Fall for the Short-Term Performance Trap : Sometimes a fund may deliver very good returns in one or two years, but its long-term performance is weak. Investing in such funds can be risky.
Step 4 – Evaluate Risk Metrics
When choosing a mutual fund, it’s just as important to consider its risk level along with its returns. A fund’s performance only truly matters if it’s consistent and balanced. Below are some important parameters that indicate the fund’s actual performance:
Standard Deviation : This indicates how volatile the fund’s returns are. A lower standard deviation means the fund is more stable.
Sharpe Ratio : This measures how much return the fund has generated relative to the risk taken. The higher the ratio, the better.
Beta : This shows how much the fund’s returns fluctuate with market movements. If the Beta is greater than 1, the fund is more volatile than the market, and if it’s less than 1, it’s less volatile.
Alpha : This indicates how much better or worse the fund has performed compared to its benchmark. Funds with a positive Alpha are considered better.
Expense Ratio : This is the small annual fee that the fund charges for managing your money. In equity funds, it’s typically around 0.5 to 2%, and lower in debt funds. The lower the expense ratio, the higher your net return will be.
Direct vs. Regular Plan : In a Direct Plan, you invest directly, so there is no commission and the expenses are lower. In a Regular Plan, investing through an agent adds a commission, which slightly reduces your return.
Exit Load : If you withdraw money from the fund before the stipulated time, you have to pay a fee of approximately 0.5%-1%. This is to discourage short-term withdrawals from the fund.
Step 6 – Check Portfolio Holdings and Diversification
Before investing in any fund, it’s crucial to see which companies and sectors it’s investing in. If a fund is heavily reliant on just one sector, the risk increases.
A good fund always diversifies its investments across different sectors such as banking, IT, FMCG, and pharmaceuticals. This is called diversification. In this way, the fund remains stable even if one sector declines, and the returns are more reliable.
Step 7 – Fund Manager’s Experience and Strategy
The performance of every fund depends on who is managing it. Therefore, it’s crucial to examine the fund manager’s experience and track record. A good manager makes the right decisions at the right time and knows how to manage the portfolio in changing market conditions. If a manager has consistently delivered good results over a long period, they are considered trustworthy.
AUM, or Assets Under Management, indicates the total amount of money invested in a fund. A large AUM generally suggests strong investor confidence and easier liquidity within the fund.
However, a very large AUM isn’t always advantageous. Especially in mid-cap and small-cap funds, a large AUM can make it difficult for the fund manager to invest effectively in smaller companies.
Step 9 – Benchmark and Peer Comparison
To understand a fund’s performance, it’s essential to compare it to its benchmark and other funds in the same category (peers). If a fund consistently delivers better returns than its benchmark, such as the Nifty 50 or Sensex, it indicates a strong strategy.
Peer comparison is equally important. By comparing your fund to other funds in the same category, you can understand how well your fund is truly performing.
Step 10 – Qualitative Factors & AMC Reputation
When choosing a mutual fund, you should consider not only the returns but also the reputation of the Asset Management Company (AMC) that manages the fund. A trustworthy AMC always acts in the best interests of investors and maintains consistency in its investment strategy. Companies with strong governance, transparent reporting, and a clear investment philosophy are the ones that consistently deliver good performance over the long term.
Choosing a mutual fund isn’t a race to see who’s offering the highest returns. The real question is which fund best suits your goals and risk tolerance. When you carefully understand and compare funds looking at their costs, performance, and stability the decision becomes much clearer. A proper comparison is key to making safe and smart investment choices.
S.NO.
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Putting money in gold is a timeless tradition in India, but buying the jewellery or coins can have some concerns like safety, purity, and high making charges that can reduce your profits. What if you could get all the benefits of owning gold in a smarter, simpler, and digital way.
This is where we see the Gold Mutual Funds in the picture, by investing in gold mutual funds, you can invest in gold digitally. These funds are the modern way to invest in gold, where the investors can own pure 24-karat gold on their phone or computer, without ever needing a locker. These mutual funds can be perfect for beginners and smart investors who want the safety of gold without the old-school hassles.
In this blog we will understand what a gold mutual fund is. Also, this blog will explain to you how gold funds work, why starting a gold SIP is a great idea, and list some of the best gold mutual fund options available in India today.
Understanding Gold Mutual Funds
How Gold Mutual Funds Work
A gold mutual fund takes money from investors and then collectively invests in gold, here a fund manager manages the investment and gold on behalf of the investors. By investing in gold like this you can actually buy real gold without the hassle to store the gold.
In India gold mutual funds work as a ‘Fund of Funds’ (FoF) meaning:
You invest your money in a gold mutual fund.
The fund manager collects money from all investors like you.
They use this money to buy units of a Gold ETF (Exchange Traded Fund).
This Gold ETF holds real, 99.5% pure physical gold in very secure vaults.
By investing using this method you get pure gold and the value of your investments move up or down depending upon the price of gold in the market.
This is the biggest gold fund in India and is also one of the oldest funds in India. Nippon gold fund gives customer returns that are closely matched to the performance of its underlying ETF, the Nippon India ETF Gold BeES.
2. HDFC Gold Fund
This is considered to be one of the most trusted fund houses of India, this fund invests in units of the HDFC Gold ETF. If you are looking for a reliable fund for your gold investments, this is the most popular choice.
3. SBI Gold Fund
This is the largest AUM in the gold funds category, which is backed by India’s most trusted bank, State Bank of India. This gold fund provides returns that correspond to the SBI Gold ETF.
4. Axis Gold Fund
Here, the fund invests in the Axis Gold ETF that copies the performance of physical gold. It allows investors to start investing in small SIP amounts.
5. Kotak Gold Fund
In this gold fund the returns are generated by investing in units of Kotak Gold ETF. This also acts as a diversified fund that combines gold and silver together to give broader precious metal exposure to the investors.
6. ICICI Prudential Regular Gold Savings Fund
This fund has the lowest expense ratio in this category and the fund generated its returns by investing in ICICI Prudential Gold ETF, making it cost-effective for the new investors.
7. Aditya Birla Sun Life Gold Fund
Here the returns are tracked based on the performance of Aditya Birla Sun Life Gold ETF, which offers another solid option from a well-known fund house.
8. DSP Gold Fund
Here the investment is done by investing in units of DSP Gold ETF and the returns are generated by this. For investors it is a simple way to invest in gold and diversify your portfolio.
9. Invesco India Gold Fund
In this gold fund the performance of Invesco India Gold ETF is tracked to get returns, it has a straightforward option for investors seeking to track gold prices.
10. Quantum Gold Fund
This fund invests in units of the Quantum Gold ETF and also has one of the lowest expense ratio compared to others which helps in cutting down the cost of investing and making increased profits.
Now that we have gone through some of the Top Gold Funds in India you might be thinking how can you invest in these gold mutual funds but platforms like Pocketful make this extremely simple for the investors as they can search for different gold mutual funds, complete their KYC digitally and start investing in different gold SIPs or even invest a lump sum amount. Pocketful gives a user-friendly interface to its users making investing in gold much easier.
By investing in these gold mutual funds investors don’t need to take on the headache of storing the gold safely. Here the fund house takes care of storing the gold in highly secured vaults; investments are stored in a digital format safely, making them safe from theft.
2. Diversified Portfolio
Gold mutual fund investments can help the investors in diversifying their portfolio. During the stress period, when the stock market might perform poorly, these gold investments can help in stabilizing one’s portfolio. This helps in protecting your overall portfolio during uncertain times.
3. Protection from Inflation and Market Volatility
It saves the investors from the inflation, as during inflation the price of commodities goes up and the value of money goes down. Gold has acted as an asset that has been guarded during inflation times. It is witnessed that when the currency depreciates during inflation, the price of gold rises helping the investor protect their wealth.
4. High Liquidity and Convenience
If you require cash instantly, selling the physical gold can be a challenge in terms of buyers, current price of the gold and even the making charges as you may not get the fair price. But buying these gold mutual funds can sell your units on any business day and get the money directly in your bank account within a few days. The process is transparent and hassle-free.
Factors to Consider Before Investing
Fund Performance History: Investors shall look for how funds have performed over the last 1, 3, and 5 years, as it helps in showing you how consistently it has tracked the price of gold. Though the previous performance doesn’t predict the future, it helps the investors in tracking the record of the fund.
Expense Ratio: Think of it as a service charge that is levied annually by the fund manager to manage your investments. A small difference in the expense ratio can affect the investor’s profit, so one should always look for the expense ratio and prefer a lower ratio.
Asset Under Management (AUM): This is a collective total amount that all the investors have put into the specified fund, here a large AUM shows the trust of investors. A good AUM also means that the fund has liquidity meaning you can easily buy or sell the units.
Tracking Error: This helps in telling the investors if the fund is working properly or not as this is used to track the performance of gold price in the actual market. Investors shall look for lower tracking error as this means that the return on your investment is very close to the actual gold returns.
Fund Manager’s Experience: While most gold funds are passively managed (they just follow the underlying ETF), it’s good to invest with a fund house that has a long history and trusted reputation in the industry. This adds a layer of reliability to your investment.
Investing in gold has changed for the better. You no longer need a large sum of money or a bank locker to own this precious metal. Gold mutual funds offer a simple, affordable, and smart way to add the stability of gold to your investment portfolio.
One should think of them as a long-term investment that protects your wealth, fights with rising inflation and brings diversification to your portfolio. You should be clear about the future goals that you want to meet and make the decision accordingly.
S.NO.
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What is the main difference between a Gold Fund and a Gold ETF?
To buy or invest in a gold ETF you need to have a Demat account but to invest in Gold Funds (which are funds of funds) you can directly do it from your bank account and there is no requirement for a Demat account.
Do Investors need a Demat account to start a Gold SIP?
No, to invest in Gold SIP you don’t require a demat account you can start a Gold SIP with just your bank account after completing your KYC.
How are Gold Mutual Funds taxed?
Gold mutual funds are taxed like non-equity or debt funds, if the units are sold within 3 years then the profit is added to your income and taxed according to your tax slab.
What is the minimum amount I can invest?
Most gold mutual funds allow you to start a SIP with as little as Rs.100 or Rs.500 per month, making gold investing accessible for everyone.
Shall I invest a lump sum amount or start a SIP in a Gold Fund?
SIP (Systematic Investment plan) helps in investing a fixed amount regularly whereas a lump sum is a one-time investment that you can consider if you have a large amount of money ready, so look according to the funds availability and your future goals.
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