Top Nifty 500 Index Mutual Funds in 2025
The Nifty 500 Index is one of the broadest equity benchmarks in India. It represents about 92.29% of the free float market capitalisation of stocks listed on the National Stock Exchange (NSE) as of 28th March 2025. Funds that track this index are known as Nifty 500 Index Funds. The funds offer exposure to large-cap, mid-cap, and small-cap companies across sectors.
In this article, we look at the Nifty 500 fund universe, including its features, taxation rules, historical performance, and considerations for investors.
Nifty 500 Index Fund List
The table below shows some of the Nifty 500 index mutual funds available in India.
| Mutual Fund Plans | AUM (Rs. in cr.) | Expense Ratio (%) | CAGR 5Y (%) | Alpha | Volatility (%) | NAV | Exit Load (%) |
|---|---|---|---|---|---|---|---|
| Motilal Oswal Nifty 500 Index Fund | 2,432.38 | 0.17 | 19.82 | 5.26 | 14.56 | 26.52 | 1 |
| Nippon India Nifty 500 Momentum 50 Index Fund | 947.24 | 0.25 | - | 11.45 | 22.83 | 7.99 | - |
| SBI Nifty 500 Index Fund | 863.35 | 0.3 | - | 7.57 | 14.94 | 9.49 | 0.25 |
| Motilal Oswal Nifty 500 Momentum 50 Index Fund | 710.51 | 0.41 | - | 11.61 | 22.74 | 7.98 | 1 |
| UTI Nifty 500 Value 50 Index Fund | 514.31 | 0.62 | - | 5.2 | 19.88 | 19.37 | - |
| Nippon India Nifty 500 Equal Weight Index Fund | 455.49 | 0.35 | - | 8.99 | 18.68 | 9.44 | - |
| Axis Nifty 500 Index Fund | 275.59 | 0.1 | - | 5.77 | 14.44 | 9.99 | 0.25 |
| Tata Nifty500 Multicap India Manufacturing 50:30:20 Index Fund | 121.21 | 0.5 | - | 6.6 | 16.83 | 11.39 | 0.25 |
| Tata Nifty500 Multicap Infrastructure 50:30:20 Index Fund | 79.88 | 0.47 | - | 5.73 | 17.33 | 10.56 | 0.25 |
| Nippon India Nifty 500 Quality 50 Index Fund | 32.83 | 0.35 | - | - | 15 | 10.68 | - |
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.
Note: The data on the list of the Nifty 500 mutual funds is from 3rd September, 2025. This data is derived from the Tickertape Mutual Funds Screener.
- AUM: Sorted from Highest to Lowest
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 Nifty 500 Index Funds
Motilal Oswal Nifty 500 Index Fund
This fund tracks the Nifty 500 index, offering exposure to large, mid, and small-cap stocks. It provides broad diversification and mirrors the overall market performance closely. It follows a passive approach and invests in all companies forming part of the index.
Nippon India Nifty 500 Momentum 50 Index Fund
This scheme follows the Nifty 500 Momentum 50 index, investing in companies showing strong price momentum. It focuses on capturing growth trends but comes with higher volatility. The portfolio changes periodically as the index rebalances its high-momentum stock selection.
SBI Nifty 500 Index Fund
The fund replicates the Nifty 500 index, giving investors access to 500 companies across market caps. It is designed to match index returns with low tracking error. It offers exposure to companies across multiple industries within the Nifty 500 index.
Motilal Oswal Nifty 500 Momentum 50 Index Fund
This fund invests in stocks from the Nifty 500 showing momentum traits. It aims to benefit from sustained price trends, though results may vary with market cycles. The fund follows a defined methodology that tracks momentum signals within the Nifty 500 universe.
UTI Nifty 500 Value 50 Index Fund
The scheme follows the Nifty 500 Value 50 index, investing in undervalued companies with strong fundamentals. It offers exposure to value-driven opportunities within the broader market. The index focuses on identifying stocks trading at relatively lower valuations.
Nippon India Nifty 500 Equal Weight Index Fund
This fund assigns equal weight to all companies in the Nifty 500 index. It reduces concentration in large caps, balancing exposure across small, mid, and large-cap stocks. The equal-weight approach gives each stock the same proportion in the portfolio.
Axis Nifty 500 Index Fund
The Axis scheme tracks the Nifty 500 index, providing broad market exposure. It invests passively across multiple sectors and market caps, aiming to replicate benchmark returns effectively. The fund portfolio aligns with the index composition and is rebalanced as per index changes.
Tata Nifty500 Multicap India Manufacturing 50:30:20 Index Fund
This thematic index fund focuses on India’s manufacturing sector. It invests in large, mid, and small-cap stocks in a 50:30:20 ratio, reflecting the Nifty 500 Manufacturing index. The allocation method provides structured exposure across different market capitalisations.
Tata Nifty500 Multicap Infrastructure 50:30:20 Index Fund
The scheme mirrors the Nifty 500 Infrastructure index, allocating 50:30:20 across large, mid, and small-cap companies. It offers exposure to India’s infrastructure and development-focused businesses. The index is designed to capture companies linked to infrastructure development and related activities.
Nippon India Nifty 500 Quality 50 Index Fund
This fund tracks the Nifty 500 Quality 50 index, investing in companies with strong financials and governance. It focuses on quality-driven growth while reducing exposure to weaker firms. The portfolio is built using quality screening criteria defined by the index methodology.
What is a Nifty 500 Index Fund?
A Nifty 500 Index Fund is a type of mutual fund that aims to replicate the performance of the Nifty 500 Index, one of the broadest benchmarks in India. The index includes the top 500 companies listed on the National Stock Exchange (NSE), covering large-cap, mid-cap, and small-cap stocks.
The idea behind a Nifty 500 fund is to mirror the index as closely as possible. Since it is passively managed, the fund does not try to beat the market but rather match its returns, minus expenses.
Taxation on Nifty 500 Index Funds
Since Nifty 500 index funds are equity-oriented, their taxation follows the rules of equity mutual funds. SIP or lump sum investments held for more than a year come under long-term capital gains.
| Capital Gains Type | Holding Period | Tax Rate (as per Budget 2024) | Notes |
| Short-Term Capital Gains (STCG) | Less than 12 months | 20% | Applies when units are sold within 1 year of purchase. |
| Long-Term Capital Gains (LTCG) | More than 12 months | 12.50% | Gains up to ₹1.25 lakh in a financial year are tax-free. No indexation benefit. |
How to Invest in the Best Nifty 500 Index Funds
You can easily start to invest in the Nifty 500 index funds by following these steps:
- Visit an equity investment platform such as smallcase
- The next step is to research and identify the best Nifty 500 index funds that match your financial goals. Tools like the Tickertape Mutual Fund Screener can help you filter and compare funds based on parameters such as returns, expense ratio, and fund size.
- Once you shortlist the funds, visit smallcase, log in, and search for the fund by name. You can then choose the investment mode, either a one-time lump sum or a 5-year SIP plan, and complete the process.
Features of Nifty 500 Index Funds
- Broad Market Exposure: These funds track the Nifty 500 index, giving exposure to large-cap, mid-cap, and small-cap companies. This wide coverage reflects more than 90% of the entire Indian stock market.
- Passive Management: A Nifty 500 mutual fund follows the index without active stock-picking. The goal is to mirror benchmark returns, making it a low-cost alternative to actively managed funds.
- Market-Linked Returns: The performance of a Nifty 500 index mutual fund directly depends on how the index performs. It captures both market growth and downturns without attempting to outperform the market.
Advantages of Investing in Nifty 500 Index Funds
- Low Cost Investing: A Nifty 500 index fund typically charges a lower expense ratio compared to actively managed funds because it passively replicates the index without heavy research or frequent trading costs. Lower costs help preserve returns over time.
- Transparency: A Nifty 500 index fund replicates the composition of the Nifty 500 index. This structure provides clarity on the underlying portfolio, as the holdings are publicly available and directly reflect the index.
- Reduced Fund Manager Bias: Being passively managed, these funds follow a rules-based approach. This mitigates the risk of underperformance due to subjective stock-picking decisions by fund managers.
- Long-Term Wealth Potential: By holding a wide market basket, these funds may benefit from India’s economic growth. However, returns depend on market conditions.
Risks of Nifty 500 Index Funds
- Market Volatility: These funds mirror the market, so their performance depends on the rise and fall of the market. A Nifty 500 index mutual fund cannot avoid downturns and may see value drop during market corrections.
- Tracking Error: Actual returns of a Nifty 500 index fund can differ slightly from the index due to fees, rebalancing, and expenses. Higher tracking error reduces the effectiveness of index replication.
- Economic Dependence: Returns of Nifty 500 Index funds are linked to the overall economy. If markets struggle due to policy, global, or sectoral challenges, the fund’s performance will reflect those conditions.
- Large-Cap Bias: Even though the index includes mid and small-cap companies, large-caps dominate its weightage. As a result, the fund often behaves more like a large-cap index during specific cycles.
Factors to Consider Before Investing in Nifty 500 Index Funds
- Market Trends: Since a Nifty 500 index mutual fund reflects 92.29% of NSE’s free-float market capitalisation, its performance is tied to overall market cycles.
- Fund Costs: Expense ratios play an important role in net returns. Even though Nifty 500 index funds are passively managed, expense differences exist across AMCs. Lower costs help preserve investor returns over time.
- Tax Implications: The returns from a Nifty 500 mutual fund held for less than one year fall under short-term capital gains tax, while holdings of more than one year are taxed as long-term capital gains. Staying updated with the latest tax rules helps set realistic expectations for post-tax returns.
- Tracking Error: Though index funds aim to replicate benchmarks, there is often a small gap. Tracking error occurs due to rebalancing and fund costs, and it can affect alignment with the index.
Who Should Explore in Nifty 500 Index Funds?
- Broad Market Seekers: Investors looking for exposure to India’s overall equity market may find these funds relevant. A Nifty 500 fund covers companies across large, mid, and small-cap segments.
- Diversification-Oriented Participants: Those aiming for diversification across multiple sectors and industries may view a Nifty 500 index mutual fund as a way to spread risk beyond narrower benchmarks like Nifty 50.
- Passive Investment Followers: Some investors prefer funds that replicate benchmarks instead of relying on active stock-picking. A Nifty 500 mutual fund follows a rules-based approach without attempting to beat the market.
- Cost-Conscious Investors: A Nifty 500 index fund generally charges lower fees compared to actively managed funds. This can appeal to those who value efficiency and want to minimise costs over time.
To Wrap It Up
Nifty 500 index funds provide one of the broadest ways to participate in India’s equity markets. These funds combine benefits such as diversification, transparency, and relatively lower costs, but they also carry risks like market volatility, tracking error, and large-cap dominance. Performance depends entirely on how the index moves, meaning both growth opportunities and downturns are reflected in returns. When comparing the best Nifty 500 index funds, factors like expense ratio, tracking error, fund size, and tax implications matter.
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Frequently Asked Questions on Nifty 500 Index Funds
Nifty 500 index funds are mutual funds that replicate the Nifty 500 index, which includes the top 500 companies on NSE. They provide exposure to large-cap, mid-cap, and small-cap stocks in one portfolio.
While analysing the best Nifty 500 index funds, investors often look at factors such as past returns, consistency, expense ratio, tracking error, and fund size. Platforms like Tickertape Mutual Fund Screener, with 200+ filters, make it easier to compare and analyse funds across these parameters.
A Nifty 500 fund invests in 500 companies across market caps, offering wider diversification. In contrast, Nifty 50 index funds focus only on the top 50 companies, making them more large-cap concentrated.
Whether the Nifty 500 index fund can perform better than active funds depends on various factors, including market cycles, fund manager decisions, expense ratios, and tracking error.
A Nifty 500 index mutual fund replicates its benchmark’s performance. Returns come from the price movement of underlying stocks and dividends declared by companies included in the Nifty 500 index.
