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Best Passive Mutual Funds 2026: Fund Performance, NAV & Returns

Passive mutual funds in India are investment schemes that mirror a market index like the Nifty 50, Sensex, or Nifty Next 50, buying the same stocks in the same proportions. Unlike actively managed funds, they don't rely on a fund manager's stock-picking calls, which keeps costs low and returns closely tied to the market.

Top Passive Mutual Funds - Best Funds, Benefits & Risks

List of Mutual Funds for Passive Investors

Here's the list of top mutual funds for passive investors in India.

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NameMF (1)↓↓Sub CategorySub Category↓↓PlanPlan↓↓AUMAUM↓↓NAVNAV↓↓Absolute Returns - 3MAbsolute Ret. - 3M↓↓Absolute Returns - 1YAbsolute Ret. - 1Y↓↓CAGR 3YCAGR 3Y↓↓Expense RatioExpense Ratio↓↓Exit LoadExit Load↓↓VolatilityVolatility↓↓% Equity Holding% Equity Holding↓↓% Largecap Holding% Largecap Holding↓↓Sharpe RatioSharpe Ratio↓
1.Motilal Oswal BSE Enhanced Value Index Fund
Motilal Oswal BSE Enhanced Value Index Fund
Index Fund
Index Fund
Growth
Growth
2,180.11
2,180.11
27.86
27.86
-2.33
-2.33
9.56
9.56
29.89
29.89
0.41
0.41
1.00
1.00
17.82
17.82
100.40
100.40
78.21
78.21
0.47
0.47
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Disclaimer: Please note that the above table is for informational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Mutual Fund Screener and is subject to real-time updates.

Selection criteria: Category: Equity | Sub-category: Index Fund | Filters: % Equity Holding: High, % Largecap Holding: High, Sharpe Ratio > 0 | AUM: Sorted from Highest to Lowest

Who are Passive Investors?

Passive investors are those who prefer a long-term and low-effort approach to investing. They usually invest in passive mutual funds like index funds or ETFs, which follow market indices such as the Nifty 50.
This approach, known as “buy and hold,” means investors purchase and keep their investments for years, without reacting to short-term market changes. The goal is to match market performance while keeping costs low and avoiding frequent trading.



What are Passive Mutual Funds?

Passive mutual funds in India are funds that try to match the performance of a market index like the Nifty 50. They don’t depend on active fund managers to pick stocks. Instead, they passively invest in the same companies that make up the index, in the same proportion.

Overview of the Top Passive Mutual Funds in India

ICICI Pru Nifty Next 50 Index Fund

ICICI Pru Nifty Next 50 Index Fund tracks the Nifty Next 50 index, which represents the 50 large-cap companies ranked just below the Nifty 50. It offers exposure to companies that are often considered potential candidates for future Nifty 50 inclusion.

UTI Nifty Next 50 Index Fund

UTI Nifty Next 50 Index Fund tracks the Nifty Next 50 index, giving investors access to the 50 large-cap stocks ranked immediately after the Nifty 50 constituents. UTI is one of the earliest and largest index fund managers in India.

DSP Nifty 50 Equal Weight Index Fund

DSP Nifty 50 Equal Weight Index Fund tracks an equal-weight version of the Nifty 50, assigning the same portfolio weight to each of the 50 constituents regardless of market capitalisation. This results in relatively higher allocation to mid-sized Nifty 50 companies compared to a standard market-cap weighted index.

Motilal Oswal BSE Enhanced Value Index Fund

Motilal Oswal BSE Enhanced Value Index Fund tracks the BSE Enhanced Value Index, which selects stocks based on value-oriented factors such as price-to-earnings, price-to-book, and dividend yield. It offers a factor-based alternative to broad market index funds.

SBI Nifty Next 50 Index Fund

SBI Nifty Next 50 Index Fund tracks the Nifty Next 50 index, providing exposure to 50 large-cap companies outside the Nifty 50. SBI Mutual Fund is one of India's largest asset managers by AUM, and this fund is among the more widely held options in the Nifty Next 50 category.

How to Invest in Passive Mutual Funds?

Here’s how you can identify and invest in top passive mutual funds with Tickertape Mutual Fund Screener -

  1. Launch Tickertape Mutual Fund Screener.
  2. Click on filter, and choose “Index Fund”
  3. Sort out the top passive mutual funds based on over 50 fundamental and technical filters.
  4. After identifying the passive mutual fund that aligns with your investment thesis, click on “Place Order” to invest in the mutual fund.

With Tickertape Mutual Fund Screener, you can invest via ‘lumpsum’ or start a ‘SIP’ in active and passive mutual funds. Moreover, by connecting your portfolio, you can do a deep analysis of your portfolio and assess its performance.

Taxation of Passive Mutual Funds

Passive mutual funds, such as index funds and exchange-traded funds (ETFs), follow the same tax rules as <a href="https://www.tickertape.in/mutualfunds/equity">equity mutual funds</a>. Here are the taxation details for passive mutual funds in India:

Capital Gains Type Holding Period Tax Rate
Short-Term Capital Gains (STCG) Less than 12 months 20%
Long-Term Capital Gains (LTCG) More than 12 months 12.5%

Types of Passive Mutual Funds

Index Funds

Index funds track a specific market index like the Nifty 50, or Nifty Next 50. They invest in the same companies and in the same proportion as the index they follow.

Fund of Funds (FoFs)

Some passive mutual funds invest in other index funds or ETFs instead of directly in stocks or bonds. These are called Fund of Funds (FoFs) and are used to access specific indices, asset classes, or geographies through a single fund.

International Index Funds

International index funds invest in global indices such as the S&P 500 or NASDAQ 100. They allow investors in India to gain exposure to international markets through domestic mutual fund platforms.

Advantages of Investing in Passive Mutual Funds

Minimal Monitoring

Passive equity funds under the buy-and-hold strategy do not require frequent market tracking. The investment stays aligned with the chosen index, reducing the need for constant oversight.

Low Cost

Passive mutual funds have lower expense ratios compared to actively managed funds because they simply track a market index instead of relying on frequent trading or research-based stock picking. This helps investors retain more of their returns over time.

Transparency

Since passive funds follow a defined index, investors can easily see what securities are included and how the fund is performing relative to the benchmark. The portfolio rarely changes, which ensures clarity.

Consistent Market Representation

These funds, including the top 10 passive mutual funds in India, mirror the performance of the broader market or specific segments. When the market rises, the fund’s value generally moves in the same direction, providing consistent exposure to market trends.

Reduced Human Bias

Passive funds are rule-based and not influenced by fund manager decisions or market timing attempts. This eliminates behavioural biases that can sometimes affect actively managed funds.

Risks of Investing in Passive Mutual Funds

Limited Liquidity

Funds under the buy-and-hold strategy may not be easily accessed during financial emergencies. Withdrawing early could affect returns or tax benefits.

Missed Opportunities

Active investors may benefit from short-term market movements. Passive investors, however, stay invested in the same index and might miss those opportunities.

Market and Performance Risks

Even though passive funds mirror established indices, they remain exposed to overall market volatility. There is no assurance that the underlying index or fund will deliver strong returns in every cycle.

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Factors to Consider Before Investing in Passive Mutual Funds

Investment Objective

Each passive mutual fund tracks a specific index such as the Nifty 50, or Nifty Next 50. Understanding the index helps investors know which part of the market the fund represents: large-cap, mid-cap, small-cap, or sector-based.

Risk Level

Even though passive funds are diversified, they still carry market risk because they move in line with the index they track. If the market falls, the fund’s value will also decline.

Tracking Error

Tracking error shows how much a passive fund’s returns differ from its benchmark index. A lower tracking error indicates that the fund closely mirrors the index’s performance, which is ideal for passive investing.

Index Selection

The chosen index determines the fund’s exposure. Broad indices like Nifty 50 offer stable large-cap exposure, while thematic or sectoral indices (like IT or Pharma) come with higher concentration risk.

Investment Horizon

Investors need to find out their investment horizon before choosing a passive mutual fund. The time period for which they plan to stay invested helps determine the suitable type of fund.

Conclusion

Passive mutual funds invest in the same companies that make up a market index like the Nifty 50. They offer an easy and low-cost way to take part in the stock market. These funds provide diversification and transparency since their portfolios closely follow the index. However, passive funds also move in line with the market, which means they can rise or fall depending on market conditions. That’s why investors must do thorough research. They can do that using the Tickertape Mutual Fund screener that comes with more than 50 pre-built filters to help analyse funds based on various parameters.

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Frequently Asked Questions About Passive Mutual Funds

  1. What are passive mutual funds?

    Passive mutual funds are investment schemes that track a specific market index, such as the Nifty 50 or Sensex. They aim to match the performance of the chosen index by investing in the same companies and in the same proportion.

  2. What are the best passive mutual funds?

    Here are the top passive mutual funds based on their 5Y CAGR, as of 18th May 2026:

    1. DSP Nifty 50 Equal Weight Index Fund
    2. Kotak Nifty Next 50 Index Fund
    3. DSP NIFTY Next 50 Index Fund
    4. UTI Nifty Next 50 Index Fund
    5. SBI Nifty Next 50 Index Fund

    Disclaimer: Please note that this passive mutual funds list is not a recommendation. Please do your own research or consult your financial advisor before investing.

  3. Who should invest in passive mutual funds?

    Investors who want to invest in funds that track market indices can explore passive mutual funds. These funds mirror benchmarks like the Nifty 50 and invest in the same companies in the same proportion.
    Disclaimer: However, investors need to understand the risks associated with these funds, do thorough research and consult a financial advisor before investing.

  4. What are the potential risks of investing in passive mutual funds?

    Passive mutual funds carry market risk, as their performance depends on the movement of the underlying index. They also face tracking error risk, which occurs when fund returns differ slightly from the index due to fund expenses or cash holdings.

  5. Can I invest in passive mutual funds through SIPs?

    Investors can start a systematic investment plan (SIP) in most passive mutual funds. SIPs allow small, regular investments that help spread out market entry and maintain financial discipline.
    Disclaimer: Please note that this is not a recommendation. Please do your own research or check the SID of the specific fund to know more about SIP plans they offer.

  6. Where do passive mutual funds invest?

    Passive mutual funds invest in the same companies and weightage as the benchmark index they track. For example, a Nifty 50 index fund invests in the 50 companies that make up the Nifty 50 index, while a Sensex index fund invests in the 30 companies that form the BSE Sensex.

  7. How can you invest in passive mutual funds?

    Here’s how you can invest in passive Mutual Funds,

    1. Launch Tickertape Mutual Fund Screener.
    2. Select the passive Mutual Funds that aligns with your investment goals.
    3. Click on “Place Order” and select the option “SIP” or "Lumpsum". Enter the amount and confirm “OK”

    Your order will be placed.

Disclaimer: This article is for informational purposes only. The content of the article including securities/investment products mentioned if any, should not in any manner be construed as an investment advice, recommendation, offer, solicitation to buy/hold/sell any securities/investment products. The securities quoted if any, are for illustration only and are not recommendatory. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Please consult a SEBI-registered financial advisor before investing.