Best IT Mutual Funds in India for 2025
With the IT sector contributing over 7.5% to India’s GDP, the IT Mutual Fund includes schemes that tap into this growing technology-driven economy. IT mutual funds invest in companies engaged in software, IT services, and digital solutions, offering investors sector-specific exposure. This article outlines the leading IT mutual funds in India, along with their features, taxation, risks, and essential factors to consider.
List of Top IT Mutual Funds in India (2025)
The table below highlights some of the top 10 IT mutual funds based 5-year CAGR, along with fund size and expense ratio. These schemes invest in leading technology and software companies.
| Fund Name | Fund Size (₹ cr) | Expense Ratio (%) | CAGR 5Y (%) |
|---|---|---|---|
| ICICI Pru Technology Fund | 14,424 | 0.96 | 22.75 |
| Invesco India Technology Fund | 327 | 0.84 | 2.50 |
| Tata Digital India Fund | 11,501 | 0.43 | 23.48 |
| Aditya Birla SL Digital India Fund(IDCW) | 4,670 | 0.86 | 21.32 |
| Franklin India Technology Fund | 1,887 | 0.98 | 21.21 |
| Quant Teck Fund | 367 | 0.86 | 9.59 |
| Axis NIFTY IT Index Fund | 126 | 0.32 | 10.37 |
| SBI Nifty IT Index Fund | 49 | 0.30 | 7.48 |
| Bandhan Nifty IT Index Fund | 24 | 0.37 | 9.43 |
| Navi Nifty IT Index Fund | 21 | 0.36 | 3.41 |
Disclaimer: Please note that the above table is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Stock Screener and is subject to real-time updates.
Criteria: 5Y CAGR: Sorted from Highest to Lowest
Note: The data on the list of the best SIP investment plan for 5 years is from 2nd September, 2025. This data is derived from the Tickertape Mutual Funds Screener.
🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.
Overview of the Top 10 IT Mutual Funds
ICICI Prudential Technology Fund
ICICI Prudential Technology Fund invests in companies from India’s IT and technology services sector. Its portfolio includes software exporters, digital infrastructure providers, and IT-enabled services. The fund aims to capture the industry’s growth potential while balancing exposure between large established firms and select emerging players, making it a well-recognised choice in the IT sector category.
Invesco India Technology Fund
Invesco India Technology Fund is a sectoral equity scheme that invests mainly in technology and IT-related companies. The fund focuses on opportunities within India’s growing tech industry, including software services, consulting, and digital solutions, while its performance remains closely linked to global technology demand and sector cycles.
Tata Digital India Fund
Tata Digital India Fund invests in IT and technology-driven businesses in India. The fund emphasises exposure to companies engaged in software, IT infrastructure, and digital transformation initiatives. Its portfolio often balances large-cap leaders with selected mid-cap firms. By targeting businesses benefiting from rising demand for digital solutions, the fund captures India’s evolving technology landscape.
Aditya Birla Sun Life Digital India Fund
Aditya Birla Sun Life Digital India Fund invests in companies from India’s IT and digital sectors. Its portfolio covers software development, telecom, and IT-enabled services. The fund aims to capture opportunities arising from rapid digitalisation, domestic IT adoption, and global outsourcing. With a mix of established leaders and growing firms, it balances risk and reward.
Franklin India Technology Fund
Franklin India Technology Fund is one of the early entrants in the IT mutual fund category. It invests in technology, software, and IT-enabled service companies. The portfolio typically includes both leading Indian IT firms and select emerging businesses. By maintaining a diversified approach within the technology sector, the fund aims to benefit from long-term growth trends.
Quant Teck Fund
Quant Teck Fund focuses on India’s technology and IT sector through a dynamic investment strategy. It invests in software companies, IT-enabled service providers, and digital infrastructure firms. The fund follows Quant’s distinctive active management style, using analytics and tactical allocation. Its goal is to benefit from market shifts and sector growth opportunities in technology and IT services.
Axis NIFTY IT Index Fund
Axis NIFTY IT Index Fund is a passively managed scheme that replicates the Nifty IT Index. It invests in top Indian IT companies like Infosys, TCS, and Wipro. The fund offers investors exposure to the performance of India’s leading IT sector stocks through an index-tracking approach, ensuring low-cost access to the technology industry’s growth.
SBI Nifty IT Index Fund
SBI Nifty IT Index Fund mirrors the performance of the Nifty IT Index. It invests in leading IT firms such as Infosys, TCS and Tech Mahindra. The fund provides diversified exposure within the technology sector. Its passive strategy ensures returns closely track the index, making it a transparent and cost-efficient IT sector fund option.
Bandhan Nifty IT Index Fund
Bandhan Nifty IT Index Fund passively tracks the Nifty IT Index by investing in India’s leading technology and IT services companies. It offers exposure to software exporters and IT-enabled businesses. By following an index-based approach, the fund reduces active management risk and gives investors a straightforward way to participate in the performance of the Indian IT industry.
Navi Nifty IT Index Fund
Navi Nifty IT Index Fund replicates the Nifty IT Index and offers exposure to top IT companies in India. The portfolio includes firms engaged in software development, IT services and digital transformation. The fund follows a low-cost passive strategy, allowing investors to benefit from the collective performance of major IT stocks without active stock-picking.
What are IT Mutual Funds?
IT mutual funds are sector-specific schemes that invest in companies from the information technology industry, including software, consulting, and digital services. Often called IT sector mutual funds, they provide focused exposure to India’s fast-growing tech industry.
Some funds track benchmarks like the Nifty IT index or build portfolios of top IT firms. These schemes can deliver strong returns during favourable cycles but carry higher risks since performance depends on one sector.
Taxation of IT Mutual Funds
Since IT sector funds fall under the category of equity mutual funds, they are taxed based on equity taxation rules.
| Capital Gains Type | Holding Period | Tax Rate (as per 2025) |
| Short-Term Capital Gains (STCG) | Less than 12 months | 20% flat |
| Long-Term Capital Gains (LTCG) | More than 12 months | 12.5% (gains up to ₹1.25 lakh in a year are tax-free) |
Key points to note:
- Taxation rules apply equally to IT mutual funds, IT MF sector schemes, and index-based options like Nifty IT mutual funds.
- Even for the best IT sector mutual fund, post-tax returns will depend on the investor’s holding period and overall tax planning.
How to Invest in IT Mutual Funds?
You can easily invest in IT mutual funds by following these steps:
- To invest in mutual funds, you can visit an equity investment platform such as smallcase or Tickertape.
- The next step would be to research and identify the best IT funds to invest in that align with your investment thesis. You can easily select and learn more about the best IT funds with the help of a financial tool like the Tickertape Mutual Fund Screener. With 50+ pre-loaded filters, it helps you to create a comprehensive list by giving insights into the fund’s performance.
- Once you have selected the funds based on different metrics and parameters, go to smallcase.com or the smallcase app, and log in via your phone number. Click on ‘Discover‘ and enter the name of the specific mutual fund in the search bar and hit enter. You can click on ‘invest now’ and select whether you want to invest a lump sum amount or start a SIP and start investing!
Features of IT Mutual Funds
- Sector Focus: These funds invest mainly in technology and software companies, making them concentrated investments in the mutual fund IT sector rather than diversified across industries.
- Growth Orientation: An IT-based mutual fund often targets companies with strong potential in digital services, IT infrastructure, and software exports, sectors that have driven India’s global technology presence.
- Professional Management: Experienced fund managers handle portfolios of IT sector funds, selecting companies based on research, earnings growth, and industry potential.
- Benchmark Tracking: Some schemes follow indices like the Nifty IT mutual fund benchmark, offering exposure to top IT companies in India.
- Accessibility: Like other mutual funds, IT-related mutual funds can be started with low investment amounts, either through SIPs or lump sums.
Advantages of IT Mutual Funds
- Exposure to a Growing Industry: IT mutual funds invest in India’s technology sector, which has been a major contributor to exports and employment. The growth of the IT sector influences these schemes, as their performance aligns with trends in technology-driven companies.
- Performance Linked to Market Cycles: During favourable cycles and sector upswings, IT-focused funds have historically reflected stronger performance. Their returns highlight how sector-based funds can benefit from periods of global competitiveness in technology.
- Innovation-Driven Opportunities: The IT industry’s growth in cloud, AI, and automation influences these funds, as exposure to such companies can affect performance during positive cycles.
- Benchmark-Based Approach: Some IT mutual funds track indices like the Nifty IT index. This approach mirrors the performance of leading technology firms through a structured portfolio.
Risks of IT Mutual Funds
- Sector Concentration Risk: IT sector mutual funds invest only in technology companies, making their performance closely linked to the industry. Any downturn in the IT sector can have a stronger impact compared to diversified funds.
- Market Volatility: The performance of IT mutual funds moves with stock market cycles. Sharp corrections in technology stocks may directly influence the returns of these sector-focused schemes.
- Global Dependency: Many Indian IT companies earn a large share of revenue from overseas clients. Currency shifts, foreign regulations, or lower global demand may affect how IT-focused mutual funds perform.
- Regulatory and Policy Risks: Rules on outsourcing, data privacy, or trade agreements can influence IT companies. Such regulatory changes may impact the overall performance of IT sector mutual funds.
- High Valuations: In strong demand phases, IT companies often trade at high valuations. When earnings growth lags valuations, IT-focused fund returns may get affected.
Factors to Consider Before Investing in IT Mutual Funds
- Investment Horizon: IT mutual funds invest in equity and track technology sector performance. They work better for long-term goals because short-term horizons may not capture full growth cycles.
- Risk Appetite: These funds face sharp ups and downs due to IT demand, earnings, and global market trends. Investors need to assess their comfort with volatility before investing.
- Industry Dependency: Returns depend on the performance of the technology sector. Unlike diversified funds, IT mutual funds focus on one industry, which links outcomes directly to sector health.
- Global Influence: Many Indian IT companies earn revenue from overseas markets. Currency movements, outsourcing policies, and global demand for technology services affect IT fund performance.
Who Can Invest in IT Mutual Funds?
- Sector Enthusiasts:. IT mutual funds may appeal to those who want dedicated exposure to technology businesses rather than diversified equity portfolios.
- Long-Term Planners: Since technology is a growth-driven industry, IT sector mutual funds may align with investors who look at long-term wealth creation horizons, though outcomes vary with market cycles.
- Thematic Investors: Individuals who prefer building portfolios around specific themes may include IT-related mutual funds as part of their allocation to capture opportunities in digital transformation and software services.
- Experienced Market Participants: Investors with an understanding of sectoral cycles and a willingness to accept higher volatility may consider IT-based mutual funds as part of their broader investment mix.
- Global Exposure Seekers: As most Indian IT companies cater to international clients, IT sector funds offer indirect exposure to global demand trends, currency movements, and outsourcing policies.
To Wrap Up…
IT mutual funds provide focused exposure to one of India’s most influential industries. By investing in technology and software companies, these schemes allow participation in the digital growth story that has shaped India’s global reputation.
The best IT mutual funds offer exposure to companies driving growth in the technology sector. Nifty IT mutual funds reflect the performance of leading IT stocks but carry both opportunities and risks. Strong past performance in IT stocks has made these funds attractive, but sector concentration and global dependencies add higher volatility compared to diversified funds.
A mutual fund IT sector scheme can deliver meaningful returns during favourable cycles, yet outcomes depend on industry performance, government policies, and global demand. As with all investments, past performance does not guarantee future results.
Looking for a Loan Against Mutual Funds (LAMF)? Explore LAMF on smallcase –
You can now apply for a loan against mutual funds (LAMF) on smallcase. Explore the quick and paperless process with the following articles about the eligibility criteria, documents required, features, benefits and more on LAMF at smallcase!
Frequently Asked Questions About IT Mutual Funds
IT mutual funds are sectoral schemes that invest mainly in companies providing technology services, software development, and IT-enabled solutions. These IT sector mutual funds focus on businesses that drive India’s digital economy.
Lists of the best IT mutual funds are usually based on past performance, fund size, and consistency. Outcomes in the future may differ from historical fund performance.
A Nifty IT mutual fund tracks the Nifty IT Index, which represents leading Indian technology companies. It offers a simple way to invest in the performance of top IT firms.
Being equity-oriented schemes, IT MFs are taxed like equity funds. Gains within one year are taxed at 20%, while gains beyond one year are taxed at 12.5%, with ₹1.25 lakh tax-free annually.
Risks include sector concentration, global dependency, and valuation pressures. Since IT-based mutual funds depend heavily on technology companies, their performance can be more volatile than diversified funds.
A mid-cap IT mutual fund may offer stronger growth potential during favourable cycles, as mid-sized IT companies can scale quickly. However, these funds carry higher volatility due to concentrated exposure compared to large-cap focused options.
Some investors look at IT companies’ mutual funds for long-term wealth creation. While the sector has shown strong growth historically, actual results depend on market cycles, policies, and global demand.
Top IT mutual funds focus only on technology stocks, while diversified equity funds invest across multiple sectors. This means IT funds carry a higher concentration risk but can benefit more from sector-specific growth.
