The number
Over the five years to 30 September 2026, the 14 Nifty 50 index funds with a full record returned between 5.50% and 6.20% a year. The median was 6.10%.
The index they track returned an estimated 6.49% a year with dividends reinvested. The funds trailed it by between 0.29 and 0.99 percentage points a year.
The figures are for each fund's Direct plan, Growth option, computed from daily NAVs. The index figure is our estimate: NSE's official Nifty 50 Total Return Index isn't in our database, so we rebuilt one from NSE's daily price and dividend yield.
Two ways to measure "tracking"
An index fund can fall short of its index in two different ways, and they get confused.
Tracking error is how much the fund's return wobbles around the index's from month to month. We measure it on 36 monthly returns, annualised. For the 18 funds with three years of data, it ran from 0.32% to 0.38%, with a median of 0.33%. That is small: these funds move almost exactly with the index.
Tracking difference is how far the fund's return lags the index's over a period. This is the part an investor actually loses, and it is mostly fees.
A fund can have a tiny tracking error and still lag the index by a full point a year, if its fee is high. That is the pattern here.
The funds, side by side
| Fund (Direct, Growth) | Expense ratio | 5-year return | Lag vs index | Tracking error |
|---|---|---|---|---|
| Bandhan Nifty 50 Index | 0.14% | 6.20% | 0.29 | 0.32% |
| Motilal Oswal Nifty 50 Index | 0.19% | 6.18% | 0.31 | 0.33% |
| Navi Nifty 50 Index | 0.10% | 6.18% | 0.31 | 0.33% |
| Nippon India Index Nifty 50 | 0.13% | 6.15% | 0.34 | 0.33% |
| DSP Nifty 50 Index | 0.22% | 6.14% | 0.35 | 0.32% |
| UTI Nifty 50 Index | 0.25% | 6.14% | 0.35 | 0.33% |
| ICICI Prudential Nifty 50 Index | 0.24% | 6.10% | 0.39 | 0.34% |
| Tata Nifty 50 Index | 0.26% | 6.10% | 0.39 | 0.33% |
| HDFC Nifty 50 Index | 0.29% | 6.09% | 0.40 | 0.33% |
| Kotak Nifty 50 Index | 0.12% | 6.09% | 0.40 | 0.35% |
| Aditya Birla Sun Life Nifty 50 Index | 0.23% | 6.09% | 0.40 | 0.33% |
| Franklin India NSE Nifty 50 Index | 0.30% | 6.09% | 0.40 | 0.33% |
| LIC MF Nifty 50 Index | 0.56% | 6.00% | 0.49 | 0.33% |
| Taurus Nifty 50 Index | 0.86% | 5.50% | 0.99 | 0.38% |
Returns are compounded a year to 30 September 2026. "Lag vs index" is 6.49% minus the fund's return, in percentage points. Expense ratios are AMFI's Direct-plan figures as of 30 September 2026 (Kotak's as of 29 September).
The order of the returns follows the order of the fees closely. Across these 14 funds, the correlation between expense ratio and five-year return is −0.93. Taurus, at 0.86%, lags by almost a full point; LIC MF, at 0.56%, by about half a point. The 12 funds charging 0.30% or less are all within 0.11 points of each other.
Other periods tell the same story
| Period | Index, estimated | Funds counted | Fund returns |
|---|---|---|---|
| 1 year | −6.91% | 23 | −7.84% to −7.12% |
| 3 years | 6.18% a year | 17 | 5.07% to 5.88% a year |
| 5 years | 6.49% a year | 14 | 5.50% to 6.20% a year |
| 10 years | 11.54% a year | 10 | 10.77% to 11.27% a year |
On the price index alone, without dividends, the Nifty 50 returned 5.13% a year over five years. Every fund beat that, because the funds collect the dividends that the price index leaves out. Comparing an index fund with the price index makes it look better than the index, which, after costs, it almost never is.
What this does not tell you
Today's fee is not the fee they always charged. We compare five-year returns with current expense ratios. Some funds have cut fees during the period, so the link between fee and return is approximate.
Our index figure is an estimate. It can differ from NSE's official total return index by a few tenths of a point a year, which would shift every lag in the table by the same amount.
Size and liquidity are not in the table. A tiny fund can track well on paper and still be harder to exit in a crisis. None of this is advice to buy or sell any fund.
Where to go from here
The index fund page lists every index fund, not just Nifty 50 trackers, and the index funds that actually track screen keeps those with a tracking error under 0.5%.
For the concepts, read tracking error and standard deviation and index funds and ETFs. To see what active large-cap managers did against the same index, see large-cap funds vs the Nifty 50.
For the same funds ranked by what they charge, see Nifty 50 index funds ranked by cost.
Frequently asked questions
What is the tracking error of Nifty 50 index funds?
For the 18 Nifty 50 index funds (Direct plan, Growth option) with three years of monthly data to 30 September 2026, annualised tracking error against the Nifty 50 ranged from 0.32% to 0.38%, with a median of 0.33%.
How much do Nifty 50 index funds lag the index?
Over five years to 30 September 2026, the 14 funds with a full record returned between 5.50% and 6.20% a year. Our estimate of the Nifty 50's total return over the same period is 6.49% a year, so the gap ran from 0.29 to 0.99 percentage points a year.
Does a lower expense ratio mean a better index fund return?
In this group, almost exactly. Across the 14 Nifty 50 index funds with five-year records, the correlation between the current Direct-plan expense ratio and the five-year return was −0.93. The cheapest fund in that group charges 0.10% and the most expensive 0.86%.
This is commentary on published data, not investment advice. WealthTicker is not a SEBI-registered adviser or distributor. Figures are as of the dates stated and can be revised by their source.
Keep reading
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