Nifty 50 And Nifty Next 50 Index Funds

Nifty 50 And Nifty Next 50 Index Funds

Is India moving towards index mutual funds? Many mutual fund advisors believe so. A host of factors like re-categorization of mutual funds, introduction of Total Returns Index(TRI) as benchmark have created an environment where a shift towards index funds looks inevitable.

Why index funds?

Because, they are simple and low-cost funds. These funds simply track the index and incur lower expenses than actively-managed funds. For example, UTI Nifty Index Fund has an expense ratio of 0.13 per cent, whereas actively-managed funds may charge around 1 per cent on direct plans and around 2 per cent in regular plans.

Which index funds?

Currently Nifty 50 and Nifty Next 50 are two prominent index funds with reasonable high Assets Under Management. Index funds are available with leading fund houses like UTI, ICICI, Franklin Templeton and others. Of them UTI Nifty 50 and UTI Next 50 are available with low Total Expense Ratio - 0.13% for UTI Nifty 50 Direct plan and 0.27 for Nifty Next 50 Direct plan.

index funds india

List of Index funds:

Aditya Birla Sun Life Index Fund
DSP BlackRock Equal Nifty 50 Fund
Franklin India Index Fund - NSE Nifty Plan
HDFC Index Fund - Sensex Plan
HDFC Index Fund-NIFTY 50 Plan
ICICI Prudential Nifty Index Fund
ICICI Prudential Nifty Next 50 Index Fund
ICICI Prudential Sensex Index Fund
IDBI Nifty Index Fund
IDBI Nifty Junior Index Fund
IDFC Nifty Fund
LIC MF Index Fund - Nifty Plan
LIC MF Index Fund - Sensex Plan
Principal Nifty 100 Equal Weight Fund
Reliance Index Fund - Nifty Plan
Reliance Index Fund - Sensex Plan
SBI Nifty Index Fund
Sundaram Smart NIFTY 100 Equal Weight Fund
Tata Index Fund - Nifty Plan
Tata Index Fund - Sensex Plan
Taurus Nifty Index Fund
UTI Nifty Index Fund

Index funds and ETFs remain a non-starter in India, managing only 4 per cent of the overall mutual fund assets. But this scenario is changing for better. New investors have started to know the importance and simplicity of index funds, have started to invest in them more.

There should be efforts from market regulator SEBI too, in stepping-up the index investing environment. SEBI should seriously look at introducing more competition into the indexing space to drive more innovation. Attracting Vanguard to the Indian markets will have clear benefits for investors at large.