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Index Funds In India - Best Index Funds for 2019

IndianMoney.com Research Team | Posted On Monday, January 14,2019, 02:37 PM

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Index Funds In India - Best Index Funds for 2019

 

 

What is an Index Fund?

 Index Fund is a mutual fund that tracks and tries to replicate an index like BSE Sensex and Nifty 50. These funds purchase all the stocks in the same weightage as the particular index. Investing in Index Funds is a passive investment.

The primary role of an Index Fund is to match the performance of the index. Returns obtained on Index Funds will be almost equal to the benchmark. Small difference between the fund’s performance and the index is called tracking error. Fund manager’s primary role is to minimize the tracking error.

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SEE ALSO: Index Funds vs Actively Managed Funds

Index Funds In India

Types Of Index Funds:

There are two types of Index funds: Exchange Traded Funds (ETFs) and Open Ended Index Funds. For investing in ETFs, you need to have a Demat account and ETFs can be bought only through brokers. You cannot invest in ETFs via SIPs. ETFs are not liquid. It takes quite some time to buy and sell ETFs.

Open ended Index Funds don’t require a demat account. These can be bought via SIPs and fractional units can be transacted,     hence they are liquid in nature.

How To Invest In Index Funds?

You can invest in Index Funds through any mutual fund distributor, by completing KYC process which is mandatory. It takes about 4-5 working days to complete the KYC process.

Finance Ministry has made KYC mandatory for investors. Investors must provide their Identity Proof, Address Proof, PAN Card, photograph and bank account details.

SEE ALSO: Index Funds Vs ETFs

Who Should Invest in Index Funds?

Index Fund is a type of Mutual Fund. Investing completely depends on the extent of risk you are ready to bear and the returns you want. Index Funds are suitable for those who want to earn returns, while not having much time to manage the investment.

Factors To Consider Before Investing In Index Funds:

1) Risk: As Index Funds replicate an index, they are less prone to volatility and market risks.

2) Returns: There will be deviations from actual index returns, called tracking error. Lower the error better is the performance.

3) Cost: Index Funds have an expense ratio of less than 0.5%. It is less because these funds are passively managed. Cost can be considered a deciding factor, as the returns earned are almost the same.

4) Investment Horizon: Index Funds are for those who want to invest for the long term. Investors should know the tenure of investing. Investors must stick to their investment until completion of tenure, to earn maximum returns on their investment.

5) Financial Goals: If you are planning to secure retirement life, then investing in these funds are apt. These funds can generate enough wealth which helps retire early and pursue a passion you always wanted.

6) Tax: Returns earned on Index Funds are taxed as per Capital Gains Tax Laws. The amount of tax you pay depends on the tenure of your investment.

SEE ALSO: How To Choose The Right Investment?

Top Index Funds In India:

1) UTI Nifty Index Fund Regular Plan Growth: This is an open-ended Index Fund. It follows the Nifty.  This fund is suitable for those investors who want an equity exposure at a low price along with elimination of business risk.

2) IDFC Nifty Fund Growth: This index fund follows the Nifty. This is suitable for those investors looking for a long-term investment plan.

3) HDFC Index Fund-NIFTY 50 Plan: The objective of HDFC Index Fund-Nifty 50 Plan is to generate returns that are in-line with the performance of the NIFTY 50 Index, subject to tracking errors. 

4) Aditya BSL Index: Aditya BSL Index aims to generate returns in-line with the performance of Nifty, subject to tracking error. This is done through investments in companies whose securities are included in Nifty and a small portion in money market instruments and cash.

5) Franklin India Index NSE: This is an open ended Index Fund. The objective of this fund is to invest in the companies whose securities are included in the Nifty.

List Of Index Funds:

Index Fund

  • BHARAT 22 ETF
  • ICICI Prudential Nifty ETF
  • HDFC Nifty 50 ETF
  • HDFC Sensex ETF
  • Reliance ETF Sensex
  • Edelweiss Exchange Traded Fund-Nifty 50
  • Axis Nifty ETF – Regular Plan
  • CPSE Exchange Traded Fund
  • ICICI Prudential Sensex ETF
  • Quantum Nifty ETF
  • LIC MF Exchange Traded Fund – Nifty 50
  • Invesco India Nifty Exchange Traded Fund
  • Kotak Nifty ETF Fund
  • Reliance ETF Nifty BeES
  • LIC MF Exchange Traded Fund – Sensex
  • Reliance ETF Dividend Opportunities
  • Edelweiss Exchange Traded Fund-Nifty Bank
  • Reliance ETF Consumption
  • UTI Nifty Index Fund – Direct Plan
  • IDFC Sensex ETF
  • IDFC Nifty ETF
  • Motilal Oswal M50 ETF Fund
  • HDFC Index Fund Nifty 50 Plan – Direct Plan
  • HDFC Index Fund – Sensex Plan – Direct Plan
  • IDFC Nifty Fund – Direct Plan
  • Reliance ETF Bank BeES
  • Kotak Banking ETF Fund Regular
  • Reliance ETF Junior BeES
  • ICICI Prudential Sensex Index Fund – Direct Plan
  • Edelweiss ETF – Nifty Quality 30
  • Motilal Oswal Midcap 100 Exchange Traded Fund
  • Reliance Index Fund – Nifty Plan – Direct Plan
  • SBI Nifty Index Fund – Direct Plan
  • LIC MF Exchange Traded Fund – Nifty 100
  • Kotak Sensex ETF Fund
  • Reliance Index Fund – Sensex Plan – Direct Plan
  • Reliance ETF NV20
  • ICICI Prudential Nifty Next 50 Index Fund – Direct Plan
  • DSP BlackRock Equal Nifty 50 Fund – Direct Plan
  • ICICI Prudential Nifty 100 ETF
  • ICICI Prudential NV20 ETF
  • ICICI Prudential Nifty Low Vol 30 ETF
  • ICICI Prudential Midcap Select ETF
  • IDBI Nifty Index Fund – Direct Plan
  • Principal Nifty 100 Equal Weight Fund – Direct Plan
  • Aditya Birla Sun Life Nifty Index Fund – Direct Plan
  • ICICI Prudential Nifty Index Fund – Direct Plan
  • Reliance ETF PSU Bank BeES
  • Kotak PSU Bank ETF
  • Sundaram Smart NIFTY 100 Equal Weight Fund – Direct Plan
  • IDBI Nifty Junior Index Fund – Direct Plan
  • LIC MF Index-Nifty Plan – Direct Plan
  • Franklin India Index Fund – NSE Nifty Plan – Direct Plan
  • ICICI Prudential Nifty Index Fund
  • Reliance ETF Infra BeES
  • Reliance ETF Hang Seng BeES
  • Reliance ETF Shariah BeES
  • Reliance ETF Nifty 100
  • SBI ETF BSE 100 Fund
  • ICICI Prudential S&P BSE 500 ETF
  • Aditya Birla Sun Life Nifty ETF Fund
  • SBI ETF Nifty 50
  • Tata Index Nifty Fund – Direct Plan
  • UTI Nifty Exchange Traded Fund
  • Kotak NV 20 ETF
  • SBI ETF Nifty Bank Fund
  • SBI ETF Nifty Next 50 Fund
  • UTI Nifty Next 50 Index Fund – Direct Plan
  • UTI Nifty Next 50 Exchange Traded Fund – Regular Plan
  • SBI ETF Sensex
  • Aditya Birla Sun Life Sensex ETF
  • Tata Index Sensex Fund – Direct Plan
  • UTI Sensex Exchange Traded Fund
  • Motilal Oswal NASDAQ 100 Exchange Traded Fund

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