Mutual Fund vs Index Fund: Did Your Fund Beat the Index?
Pick your fund. See its real returns next to the index fund for its category and the Nifty 50, and what your SIP would have grown to in each.
Over the five years to September 2026, 142 of 179 active equity funds' direct plans beat the index fund for their category, but only 112 of 180 regular plans did, measured from AMFI's NAVs; in large-cap funds, 17 of 27 regular plans beat a Nifty 100 index fund. Funds that closed or merged along the way are not counted, which flatters active funds.
An index fund simply buys every share in an index such as the Nifty 50, at a very low cost. An active mutual fund pays a manager to pick shares and try to do better. Pick your fund to see whether it actually beat the index fund for its category over 1, 3 and 5 years, and what your SIP would have grown to in each, from AMFI's month-end NAVs.
The words on this page, explained simply
New to this? Here is what each term means, in plain English.
- Mutual fund
- A pot of money pooled from many people and invested by a professional fund manager in shares, bonds or both. You own units of the pot, and their value rises and falls with what it holds.
- Index fund
- A mutual fund that simply buys every share in an index, such as the Nifty 50, in the same proportions. It does not try to pick winners, so it costs very little and earns what the index earns.
- Active fund
- A mutual fund whose manager chooses which shares to buy and sell, trying to do better than the market. It charges more than an index fund for that work.
- Benchmark (index)
- The yardstick a fund is measured against: an index of the kind of shares the fund is meant to buy. A large-cap fund is measured against the Nifty 100, a small-cap fund against the Nifty Smallcap 250.
- Direct plan
- The version of a fund you buy straight from the fund house or a direct-plan app. No distributor is paid, so its yearly cost is lower and its returns higher.
- Regular plan
- The version of the same fund sold through a bank, agent or distributor. Their commission is taken from the fund every year, so it returns less than the direct plan.
- CAGR (compound annual growth rate)
- The steady yearly growth rate that takes a starting amount to an ending amount. If ₹1 lakh became ₹2 lakh in 6 years, the CAGR is about 12.2% a year, even if some years were up and some down.
- Rolling return
- The return over a fixed stretch, such as 3 years, measured again starting from every month. It shows how often a fund did well instead of depending on one lucky or unlucky start date.
- SIP (Systematic Investment Plan)
- Putting a fixed amount into a mutual fund every month, like a recurring deposit, instead of investing everything at once.
- Survivorship bias
- Funds that do badly are often closed or merged into others, so they vanish from today's lists. Looking only at the funds still open makes the whole group look better than it really did.
A mutual fund pools money from many people and invests it in shares. Most equity funds are active: a fund manager picks which shares to buy, hoping to do better than the market. An index fund is passive: it buys every share in an index, such as the Nifty 50 (India's 50 largest listed companies), in the same proportions, so it earns what the index earns, minus a very small cost.
The question that matters is simple: after all its costs, did your active fund give you more than the index fund would have? The checker answers it from AMFI's published NAVs (the price of one unit of a fund). It puts your fund next to a low-cost index fund that tracks the right index for its category, and next to a Nifty 50 index fund, over the same months.
Which index is your fund measured against?
Comparing every fund with the Nifty 50 is unfair to funds that are meant to hold smaller companies. So each category is measured against the index that matches what it is allowed to buy: large-cap funds against the Nifty 100, mid-cap funds against the Nifty Midcap 150, small-cap funds against the Nifty Smallcap 250, large and mid-cap funds against the Nifty LargeMidcap 250, and flexi-cap, multi-cap, focused, value, contra, dividend-yield and ELSS (tax saver) funds against the Nifty 500. Sector and theme funds have no fair broad index, so they are shown against the Nifty 50 only.
The index is represented by the direct plan of a real, low-cost index fund that tracks it. Its NAV includes the dividends the shares paid, just like your fund's, and it is what you could actually have earned by owning the index.
Direct or regular: why the answer can change
Every fund comes in a direct plan and a regular plan; the regular plan is sold through a distributor and costs more each year. A fund manager who beats the index by a little can still leave a regular-plan investor behind it, because the extra cost eats the lead. That is why the checker shows both plans, and why far fewer regular plans beat their index than direct plans of the same funds.
Your account statement (CAS) says Direct or Regular next to each fund. If it does not say Direct, it is regular.
One period is not the whole story
A fund can look brilliant or poor depending on the start and end dates you pick. So, as well as the last 1, 3 and 5 years, the checker looks at every 3-year stretch in the fund's history, starting each month, and counts how many of them the fund beat its index in. A fund that beat the index in most of those stretches has been consistently ahead; one that beat it in only a few has mostly lagged, whatever its latest number says.
How the numbers are worked out
Strota takes the last NAV of every month for every open-ended equity fund's Growth plan from AMFI. Yearly returns are compounded (CAGR) between the same month-ends for the fund and the index fund. The SIP replay buys units at each month-end NAV for the amount you enter and values them at the latest month-end. IDCW (dividend) options are left out, because their NAV drops at each payout.
Only funds that are still open today are included. Funds that did badly are often merged into others or closed, and they drop out of every list like this one. That makes active funds as a group look better than the full record would, so the share of funds beating their index is, if anything, too generous. Past returns are not a forecast.
Key takeaways
- An index fund earns what its index earns, minus a very small cost; an active fund tries to beat it.
- Measure a fund against the index for its category, not always the Nifty 50.
- Regular plans beat their index far less often than direct plans of the same funds.
- Look at many 3-year stretches, not one: consistent funds beat the index in most of them.
- Only surviving funds are counted, which flatters active funds.
Frequently asked questions
Is an index fund better than an active mutual fund?
Neither is better in every case. An index fund guarantees you the index's return minus a very small cost. An active fund can beat that or fall behind it. The checker shows, fund by fund, which actually happened over 1, 3 and 5 years and across every 3-year stretch, from AMFI's NAVs.
How do I know if my mutual fund beat the Nifty?
Pick your fund and plan in the checker. It shows the fund's yearly return next to a Nifty 50 index fund and the index fund for its category over the same months, and replays your SIP in each.
Which index should I compare my fund with?
The one that matches what the fund buys: Nifty 100 for large-cap funds, Nifty Midcap 150 for mid-cap, Nifty Smallcap 250 for small-cap, Nifty LargeMidcap 250 for large and mid-cap, and Nifty 500 for flexi-cap, multi-cap, focused, value, contra and ELSS funds.
Why does my fund's regular plan lag the index when the direct plan beats it?
The regular plan pays a distributor commission every year from the fund's value, so it returns less than the direct plan of the same fund. If the fund's lead over the index is smaller than that extra cost, the regular plan ends up behind the index.
What is a rolling return?
It is the return over a fixed length of time, such as 3 years, measured again starting from every month in the fund's history. It shows how often a fund did well, instead of depending on one start date.