What is Jio BlackRock equity index fund and what you should know before investing? Explained

You may invest in these schemes during the NFO period with a minimum subscription amount of ₹500. Before investing, however, it's better to first understand what these schemes are all about.

Four of these five schemes are equity index funds that will invest up to 100% of their assets in equity and equity-related securities of companies comprising the indices they track. But what are equity index funds? This article will help you understand, along with key things to know before investing in any of the four Jio BlackRock index funds, and more.

What is an equity index fund?

An equity index fund is a mutual fund that passively invests in equity and equity-related securities of companies listed in the index it is tracking. By passive, we mean the equity index fund simply mimics the index. It invests in stocks in the same proportion in which they are listed in the index. By doing so, it tries to generate returns similar to the index in the long run, subject to tracking error.

However, AMFI's classification of mutual funds does not include a separate category for equity index funds. They are clubbed together with various ETFs, debt, thematic and other index funds under the "Other" category.

On the website of the Association of Mutual Funds in India (AMFI), mutual funds are categorised into the following:

• Equity Mutual Funds
• Hybrid Funds
• Debt Funds
• Solution-oriented Funds
• Other Funds

Equity index funds are different from regular equity mutual funds.

While equity index funds find mention in the "Other" category and are apt for investors interested in passively tracking the performance of an index, equity mutual funds are active schemes where fund managers are actively involved in stock-picking and asset allocation to maximise returns for investors.

After the completion of the NFO period, the four equity index funds of Jio BlackRock AMC will also be listed in the "Other" category on AMFI's portal.

Can Jio BlackRock equity index funds beat their indices?

Likely no. Index funds are not designed to beat their indices. Rather, they aim to mimic the return of the indices they are tracking, which is further subject to the tracking error.

Data on the AMFI website as of July 5, 2025, shows that not a single index fund has outperformed the index over 10 years.

What are the Jio BlackRock equity index funds and where will they invest?

The following are the four Jio BlackRock equity index funds currently open for subscription under NFO:

• JioBlackRock Nifty Midcap 150 Index Fund: It will invest in stocks in the Nifty Midcap 150 Index.
• JioBlackRock Nifty Next 50 Index Fund: It will invest in stocks in the Nifty Next 50 Index.
• JioBlackRock Nifty Smallcap 250 Index Fund: It will invest in stocks in the Nifty Smallcap 250 Index.
• JioBlackRock Nifty 50 Index Fund: It will invest in stocks in the Nifty 50 Index.

Things to know before investing in Jio BlackRock equity index funds

Before investing in any of the Jio BlackRock equity index funds, it will be better to know a few of the points discussed below.

Equity index funds are suitable for investors interested in passively replicating the performance of an index over the long term.

For example, if you want to have a return similar to the Nifty 50 over the next 15-20 years, you may start investing in the Jio BlackRock Nifty 50 Index Fund.

However, if you want to have index-beating returns, an active equity mutual fund tracking the Nifty 50 may be a better choice.

Index funds are often marketed as a less risky and reliable option for long-term wealth generation. These claims are not fully true as index funds are also subject to market risks with no assurance that their investment objectives will be met.

Although the fund manager's role in managing an index fund is not as difficult as an active fund manager, the manager's efficiency can help reduce the tracking error over the long term. This brings to the point that a fund and its manager's track record are relevant even in the case of index funds.

As each index fund tracks a particular index, the risk associated with one index fund may not be the same as that of another. For example, JioBlackRock Nifty 50 Index Fund will replicate Nifty 50 index, which is considered less volatile than the Nifty Smallcap 250 Index, tracked by the JioBlackRock Nifty Smallcap 250 Index Fund.

The taxation of returns from equity index funds will be the same as any equity mutual fund: 12.5% tax on long-term gains and 20% on short-term gains.

Lastly, there has been a flood of index funds in the market over the last few years. So investors should pick their funds wisely. You should consider investing in any scheme only if it truly suits your financial goals and you fully understand the risks involved with such an investment.