At the end of October 2024, there were 260 index funds in India in which money was pouring in through 1,19,03,173 folios, or 1.19 crore folios. A total of Rs 12,030.68 was collected in these schemes in October, while net AUM on October 31 was at Rs 2,67,824.06 crore. Now compare this figure at the in May 2024. There were 217 index funds then and the number of folios stood at 83.63 lakh. It means between May and October the number of index funds rose 20% while the number of folios jumped 43%.
Experts point out that while the bull party lasted in the markets, it was relatively easier for the fund managers to generate significant returns. The popularity of index could be substantially due to the fact that they offer a simple and less expensive way of accessing a diversified portfolio of stocks.
What is an index fund
Index funds are a class of passive funds which track a group of stocks that are identical to a chosen index. Each of these funds mirror the movement of a particular index, and therefore, the name index fund. Since they don’t have a fund manager actively managing them, these funds are far less expensive to manage. Most index funds don’t have exit loads and for some the exit load hovers between 0.25% and 0.50%.
What are the best index funds
While there can be no outright answer to this question, some of the better performing index funds and their returns are mentioned below:
Motilal Oswal Nifty Next 50 Index Fund: 49.39% (1-year returns); 16.16% (3-year returns)
Motilal Oswal S&P 500 Index Fund: 37.11% (1-year returns); 13.95% (3-year returns)
ICICI Prudential Nifty IT Index Fund: 40.58% (1-year returns); 21.54% (2-year returns)
Bandhan Nifty 200 Momentum 30 Index Fund: 41.99% (1-year returns); 29.01% (2-year returns)
ICICI Prudential Nasdaq 100 Index Fund: 37.05% (1-year returns); 13.79% (3-year returns)
Axis Nifty 100 Index Fund: 27.73% (1-year returns); 11.33% (3-year returns)
New realisation about index funds
Apart from the portfolio diversification factor, Nilanjan Dey thinks that the attitude of investors is also changing gradually. “It is dawning on the investors that it is not humanly possible for any fund manager, in India or for that matter, anywhere in the world, to provide superior returns continuously to please the investors. Therefore, more and more people are opting for index funds,” Dey told News9.
A recent survey by Motilal Oswal has found that almost half of the investors under 43 favour index funds. A few factors have led to the rise in popularity of index funds. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
