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.