While all index funds replicate an underlying index, investors – beginners and matured – must take into account a few parameters when investing in these mutual fund schemes. Factors like assets under management, expense ratio and tracking error play an important role in selecting an index fund.
Here’s a list of index fund schemes. The criteria set for the list are that the fund should fall in the top 75 percentile in terms of AUM, must have a low expense ratio and low tracking error.
ICICI Pru Nifty50 Index Fund
This is an open-ended index-linked scheme which tracks the returns and performance of the Nifty 50 index. The objective of the scheme is to invest in companies whose securities or stocks are included in the Nifty50 index. The fund invests in all the Nifty 50 stocks in the same proportion as the index.
UTI Nifty 50 Index Fund
UTI Nifty50 Index fund is an open-ended scheme. This index fund replicates or tracks the Nifty 50 Index. Investors get exposure to 50 large quality companies from the Nifty50 universe. Also, keeping in line with the index, stocks or constituents of this fund are reviewed every six months. The fund’s top 5 holdings are Reliance Industries, HDFC Bank, ICICI Bank, Infosys, Housing Development Finance Corporation.
HDFC Index Nifty 50 Fund
HDFC Nifty 50 Index fund is an open-ended mutual fund scheme, which replicates or tracks the performance of the Nifty 50 Index. Launched in 2015, the fund provides exposure to 50 large companies in India. It also offers investors an opportunity to invest in a diversified portfolio of stocks. This index fund is suitable for investors with a long term horizon.
SBI Nifty Index Fund
This is an open ended scheme. The fund currently has an asset under management of ₹6,43,285 crore. This scheme is suitable for investors seeking long-term capital appreciation. This passive fund invests in the same stocks and in the same proportion as the Nifty50 Index.
HDFC Index S&P BSE Sensex Fund
This index fund is an open-ended mutual fund scheme. It replicates or tracks the performance of S&P BSE Sensex which is one of the major benchmark indices in India. Through this fund, investors get exposure to 30 large cap and well-established companies listed on the BSE.
This index fund is suitable for investors who are seeking to invest in equities from the Sensex.
UTI Nifty Next 50 Index fund
UTI Nifty Next 50 Index Fund is an open-ended index fund scheme. This fund replicates or mimics the Nifty Next 50 Index. This index fund consists of 50 companies from the Nifty 100 universe. However, the companies, which are a part of the Nifty 50 space, are excluded from this index fund. This fund is suitable for investors who are looking for capital growth in tune with the returns of the Nifty Next 50 Index.
ICICI Pru Nifty Next 50 Index fund
This index fund invests in companies whose securities are included in Nifty Next 50 Index. It aims to achieve the returns of this underlying index as closely as possible. This is subject to the tracking error. The scheme will not seek to outperform the underlying index. The index fund’s top three holdings are L&T, Pidilite Industries and Godrej Consumer Products.
FAQs
Index funds are a crucial component of diversification in an investing portfolio. Moreover, diversification is considered a secure way to reduce exposure to market risks. Investing in mutual funds is a proven way for investors to improve the diversification of their portfolio.
Which index fund is best for beginners? ›
Best Index Funds to Invest
- UTI Nifty Index Fund: ...
- ICICI Prudential Nifty Next 50 Index Fund: ...
- Mirae Asset Nifty 50 ETF: ...
- HDFC market Fund - Sensex Plan: ...
- Nippon India Index Fund - Sensex Plan: ...
- SBI Nifty Index Fund: ...
- Motilal Oswal Nasdaq 100 ETF: ...
- Kotak Nifty ETF:
Index funds are a crucial component of diversification in an investing portfolio. Moreover, diversification is considered a secure way to reduce exposure to market risks. Investing in mutual funds is a proven way for investors to improve the diversification of their portfolio.
Can I invest 500 in Upstox? ›
Yes, an advantage of SIPs is that you can start investing with a small amount. Many mutual fund houses offer SIPs with minimum investment amounts as low as Rs. 500.
Which is best to invest in Upstox? ›
Summary
- PAYTM4.99%
- CANBK0.26%
- WIPRO-1.02%
- POWERMECH2.00%
- TVSMOTOR-0.69%
In order to purchase shares of an index fund, you'll need to open an investment account. A brokerage account, individual retirement account (IRA) or Roth IRA will all work. You can then buy the fund in the account.
How to invest in S&P 500 for beginners? ›
You can't directly invest in the index itself, but you can buy individual stocks of S&P 500 companies, or buy a S&P 500 index fund through a mutual fund or ETF. The latter is ideal for beginner investors since they provide broad market exposure and diversification at a low cost.
How do I buy index ETF in Upstox? ›
Steps to buy ETF in Upstox Pro Web
- Login with user id and password.
- Click + sign in the left side to add an ETF to watchlist.
- Click on the [B] button next to the added ETF to buy it.
- Enter order details like price, quantity, order type, positions, validity etc.
- Review and Confirm.
Exchange-traded Funds (ETFs) are a type of investment fund which are bought and sold on stock exchanges, just like stocks. ETFs are formulated to monitor the movements of a specific commodity, index, sector, or related assets.
How to buy nifty in Upstox? ›
Once you move your mouse to the Nifty Bank option you see, you will see three options: chart, B and S. B stands for buy and S stands for sell and chart is your price chart. If you want to buy the stock, simply click on the B option.
How much is Rs. 5,000 for 5 years in SIP? If you invest Rs. 5,000 per month through SIP for 5 years, assuming 12% return. The estimate total returns will be Rs. 1,12,432 and the estimate future value of your investment will be Rs. 4,12,431.
Is Upstox profitable or not? ›
Broking revenue in 2022-23 was up 44 per cent to over ₹1,000 crore. In the last two quarters this fiscal, Upstox has generated over ₹ 200 crore in cash, Kumar noted, adding that the firm was now a very profitable business.
How to earn 1200 from Upstox? ›
Upstox Refer and Earn Amount
The amount of referrals is in the range of ₹500 to ₹1200 or even more. This is only credited to your account only when your friend uses your link to open a demat account with Upstox and further trade using the app.
Is Upstox good for beginners? ›
Upstox presently provides the best Demat account for beginners in India.
What is the disadvantage of Upstox? ›
Upstox Cons (Disadvantages)
Most other brokers offer stock deliveries without brokerage fees. Upstox doesn't offer unlimited monthly trading plans. Margin funding isn't available for delivery trades. Doesn't offer stock tips or recommendations.
Is Upstox better than Zerodha? ›
Upstox is better than Zerodha only in terms of account opening fees and annual maintenance fees. A beginner investor can open a free account with no annual maintenance fees. Zerodha, on the other hand, appeals to active investors and traders with its free equity delivery and lower brokerage charges.
How much money do I need to start an index fund? ›
How much is needed to invest in an index fund? The minimum needed depends on the fund and your broker's policies. If your broker allows you to buy fractional shares of stock, you may be able to invest in index fund ETFs with as little as $1. If not, your minimum investment will be the cost of one share of the ETF.
Is it OK to only invest in index funds? ›
If you're new to investing, you can absolutely start off by buying index funds alone as you learn more about how to choose the right stocks. But as your knowledge grows, you may want to branch out and add different companies to your portfolio that you feel align well with your personal risk tolerance and goals.
How to pick a good index fund? ›
How Do I Choose an Index Fund to Invest in?
- Representative: The fund should provide the full range of opportunities available to its actively managed fund peers.
- Diversified: A wide array of holdings should be on offer.
- Investable: It should invest in liquid securities that are easy to track.
Over the long term, index funds have generally outperformed other types of mutual funds. Other benefits of index funds include low fees, tax advantages (they generate less taxable income), and low risk (since they're highly diversified).
