Best performing Index Funds and ETFs

Index funds and Exchanged Traded Funds are passively managed funds, unlike other mutual fund schemes that are actively managed. 

Fund managers of passively managed funds track and imitate the performance of the underlying index. The primary difference between index funds and ETFs are – transaction in Index funds happens at end of the day at Net Asset Value (NAV) and they can be bought and sold only for the price set at the end of the trading day, while, ETFs can be traded on real market times and they can be bought and sold anytime like any other stock of the company. These funds have a very low expense ratio as compared to other schemes of mutual funds as these funds are passively managed funds. ETFs offer higher liquidity as compared to index funds. 

These funds are taxed accordingly: 

Short Term Capital Gains 

Non-equity-oriented Capital Gains: Capital gains arising within three years i.e., 36 months then gains are taxed as per slab rate of income tax.

Equity oriented Capital Gains: Capital gains arising within 12 months i.e., one year then gains are taxed at the rate of flat 15 per cent. 

Long Term Capital Gains 

Non-equity-oriented investments: Capital gains arising within three years i.e., 36 months then gains are taxed at the rate of flat 20 per cent with the benefit of indexation. 

Equity oriented investments: Capital gains arising within 12 months i.e., one year then gains are exempt up to Rs 1 lakh and above Rs 1 lakh it will be taxed at the rate of 10 per cent without indexation. 

The following table depicts the best performing Index Funds and ETFs based on 2-year returns: