Top 10 Index Funds.

Top 10 Index Funds.
by 5paisa Research Team 13/10/2021

Passively managed funds such as Index funds are gaining momentum. Read on to find the detail about index funds that track the frontline equity index, Nifty 50.

Investors who are not well versed with equity investment, however, want to benefit from the equity investment can opt for index funds. According to data from the Association of Mutual Funds in India (AMFI), Asset under management (AUM) surged almost three times during in last year. AUM at the end of September 2021 stood at Rs 33824 crore against Rs 12581 crore the same month last year. Although most of the investment comes in schemes that replicate indices such as Nifty 50 and S&P BSE Sensex, others are also gaining ground now. So you will find index funds imitating mid-cap and small-cap indices also.

Given this popularity, Navi AMC recently launched the cheapest Nifty 50 index fund that has an expense ratio of 6 basis points. Besides expense ratio what is also important before selecting an index fund is tracking error. Tracking error is the difference in actual performance between the fund and its corresponding benchmark. So even if the index fund has a very low expense ratio, and a higher tracking error, it may not solve the purpose of investing in index funds. Hence, it is important to look at both expense ratio and tracking error before committing your fund to an index fund.

Below table shows the index funds that track Nifty 50 and is sorted based on tracking error.

This is the table code -

Name  

Expense Ratio  

Tracking Error  

AUM in Cr  

NAV (Rs)  

SBI Nifty Index Fund  

0.17%  

0.10%  

1530  

160.28  

HDFC Index Fund-NIFTY 50 Plan  

0.20%  

0.10%  

4000  

167.79  

UTI Nifty Index Fund  

0.20%  

0.11%  

5216  

120.46  

DSP Nifty 50 Index Fund  

0.21%  

0.13%  

122  

16.3  

ICICI Prudential Nifty Index Fund  

0.17%  

0.14%  

2160  

181.37  

IDFC Nifty Fund  

0.16%  

0.15%  

357  

38.22  

L&T Nifty 50 Index Fund  

0.25%  

0.16%  

80  

20.28  

Aditya Birla Sun Life Index Fund  

0.34%  

0.18%  

257  

179.19  

LIC MF Index Fund – Nifty Plan  

0.49%  

0.18%  

50  

103.22  

Nippon India Index Fund – Nifty Plan  

0.20%  

0.20%  

420  

31.59  

Franklin India Index Fund – NSE Nifty Plan  

0.26%  

0.20%  

458  

146.78  

Tata Index Fund – Nifty Plan  

0.19%  

0.21%  

200  

116.68  

Motilal Oswal Nifty 50 Index Fund  

0.10%  

0.30%  

105  

14.91  

IDBI Nifty Index Fund  

0.16%  

0.67%  

220  

35.38  

Kotak Nifty 50 Index Fund  

0.20%  

0.67%  

91  

11.4  

The above table shows that though, Motilal Oswal Nifty 50 Index Fund has the lowest expense ratio, it has a higher tracking error. Hence, the best combination is the fund that has lower expense and tracking error.

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