Last Updated on September 5, 2022 at 4:14 pm
Axis Nifty 100 Index Fund is an open-ended index that aims to achieve a return close to Nifty 100 subject to tracking error. The Fund was launched in Oct 2019 and currently has an AUM of about 760 Crores.
When the fund launched, we reviewed the underlying index in detail and mentioned that we needed some time to check its tracking error to offer a recommendation.
We then wrote another article in Dec 2019 – Axis Nifty 100 Index Fund Impressive AUM but is it expensive? Since then, index funds became considerably popular, and the Nifty/Sensex funds we considered less expensive than the Axis fund grew in AUM and became more expensive!
Before we consider this, it is important for the reader to appreciate that Nifty 100 does not mean 50 more stocks than Nifty 50. Because the weightage is determined using free-float market capitalization, the top 10 stocks of both indices contain the most weight. For example, see: Do index fund returns depend upon just a few stocks (Concentration risk)?
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Therefore Nifty 100 only offers marginally higher returns than Nifty 50 from time to time (not always). Please refer to our two previous articles on Axis Nifty 100 fund linked above.
Today Axis Nifty 100 is the 9th most popular index fund in terms of AUM.
| Scheme Name | AUM(Cr) |
| UTI Nifty 50 Index Fund | 7068.0982 |
| HDFC Index Fund-NIFTY 50 Plan | 5940.6023 |
| HDFC Index Fund-S&P BSE Sensex | 3390.3857 |
| ICICI Pru Nifty 50 Index Fund | 3065.5284 |
| SBI Nifty Index Fund-Reg | 2416.9344 |
| ICICI Pru Nifty Next 50 Index Fund | 2042.7387 |
| UTI Nifty Next 50 Index Fund-Reg | 1627.0341 |
| UTI Nifty200 Momentum 30 Index Fund | 1474.9560 |
| Axis Nifty 100 Index Fund | 760.1773 |
Today Axis Nifty 100 Index fund is the least expensive among the top 9.
| Month End | Expense Ratio(%) |
| Axis Nifty 100 Index Fund(G)-Direct Plan | 0.1500 |
| ICICI Pru Nifty 50 Index Fund(G)-Direct Plan | 0.1800 |
| SBI Nifty Index Fund(G)-Direct Plan | 0.1800 |
| HDFC Index Fund-NIFTY 50 Plan(G)-Direct Plan | 0.2000 |
| HDFC Index Fund-S&P BSE Sensex(G)-Direct Plan | 0.2000 |
| UTI Nifty 50 Index Fund Direct Plan | 0.2100 |
| ICICI Pru Nifty Next 50 Index Fund(G)-Direct Plan | 0.3000 |
| UTI Nifty Next 50 Index Fund(G)-Direct Plan | 0.3300 |
| UTI Nifty200 Momentum 30 Index Fund(G)-Direct Plan | 0.4200 |
However, in Dec 2019, these three funds were less expensive (than Axis N100).
- ICICI Pru Nifty 50 Index Fund(G)-Direct Plan
- HDFC Index Fund-S&P BSE Sensex(G)-Direct Plan
- UTI Nifty 50 Index Fund Direct Plan
This is how AMCs operate. They keep the TER low to entice subscriptions and then jack it up. The Axis fund has maintained its TER at 0.15% since inception (aside from the first few months when it was 0.16%). This is again a ploy to invite AUM. Investors should not be misled by this. If the Nifty 100 fund swells tomorrow, Axis too can be expected to jack up the TER.
Axis Nifty 100 Index Fund Performance
There are two ways in which an index fund can be evaluated: (1) how much its return differs from that of the total returns index and (2) how low is the tracking error. We publish both metrics for 40+ index funds each month. The following data is taken from the latest edition: Index fund tracking error screener July 2022.
| Qty | 1 Year return | 2 Years return |
| NIFTY 100 – TRI | 4.0532 | 24.4209 |
| Axis Nifty 100 Index Fund(G)-Direct Plan | 3.8831 | 23.9278 |
| Difference | -0.1701 | -0.4931 |
That is fairly decent. The Axis fund has the 5th smallest difference over the last 1Y (as of July 10th 2022) and the 12th smallest difference over the last 2Y (as of July 10th 2022), which is not too shabby.
Tracking error:
- Last 1Y: 0.053% – 17th out of 43 funds. The top 14 comprise Nifty and Sensex funds, which are easier to track than the Nifty 100. The 15th and 16th funds are Nifty Next 50 funds from UTI and SBI. The top has a tracking error of 0.0429% (refer to our screener for more details)
- Last 2Y: 0.0729% – 21st out of 41 funds. The topper has a tracking error of 0.0486%
This is not spectacular but also not disastrous.
The Axis Nifty 100 Index Fund has been an above-average performer over the last year and an average performer over the last 2Y. At least until its AUM swells up some more, the fund house is likely to retain the same TER.
Investors who want a predominantly large cap portfolio (like Nifty or Sensex) with a dash of mid caps (in this context up to about 25% of Nifty Next 50) in a single fund can consider the Axis Nifty 100 Index fund. For an explanation, see: Combine Nifty; Nifty Next 50 funds to create large, mid cap index portfolios.