This is the archive of all our articles related to how index investing or passive investing
A reader asks, “I cannot decide between Nippon India Nifty 50 Bees ETF and UTI Nifty 50 Index Fund. The ETF has a total expense ratio of 0.05%, while the index fund’s TER is 0.2%. My friends tell me that ETF is bound to outperform the index fund over the long term and that choosing…
Continue reading →As of Aug 31st 2022, 59.5% of the total equity AUM was in Nifty 50 stocks. Here are the details and possible implications. The total equity AUM held by 40 mutual fund AMCs is Rs. 21,91,563.5357 Crores. The break-up is given below. The tables in this article are sourced from ACE MF. AMC Equity (Cr.)…
Continue reading →A reader writes, “I want to ask you if this asset allocation in index funds is right or wrong. I am not good at finance. These are the index funds which I invest in every month. Nifty 50 – 35.71% Nifty Next 50 – 35.71 % Gold Index fund – 14.28 % Mid-cap index fund…
Continue reading →This article lists six model equity portfolios by combining different equity index funds. We now have both the evidence and the variety to create such portfolios. We have mentioned several times in the past that index funds are the way to go for new mutual fund investors. Even in the mid cap and small cap…
Continue reading →This is the list of equity index funds in India with AUM and expense ratios as of Aug 21st 2022. This includes ongoing and forthcoming NFOs at the time of writing. This list is only for reference. For investment recommendations, see: Handpicked List of Mutual Funds Jul-Sep 2022 (PlumbLine). Readers may know that we publish…
Continue reading →A reader writes, “Sir, I recently read your article – Sensex vs S&P 500 vs Nasdaq 100: Which is better for the long term? In this, you have plotted the S&P 500 and the Nasdaq 100 in INR terms. Is there a way to quickly make such a comparison on our own?” As far as…
Continue reading →A reader writes, “Sir, you have repeatedly pointed out that it is hard for most active funds to beat the index, and this applies not only to large cap funds but also to mid cap and even small cap funds (when benchmarked with a mid cap index). However, can I use a hybrid like an…
Continue reading →A reader asks, “Sir, can we use Sensex or Nifty ETFs for long term goals instead of index funds? If so, which is better, Sensex or Nifty ETFs?” We recommend not using any ETF for investing because of possible price-NAV swings during times of crisis and their persistence for weeks. This can happen in any ETF…
Continue reading →In this article, we explain why conventional ways of measuring ETF tracking errors can be misleading and present an alternative. The efficiency of a passive fund (index fund or ETF) is measured by the tracking error or tracking difference. The tracking difference is simply the fund return minus benchmark return. This must be a small…
Continue reading →In this article, we tabulate index funds with the largest deviation in 1Y return (trailing as of 8th July 2022) from their corresponding indices. Regular readers may be aware that the most practical way to evaluate how efficiently an index fund is tracking its index is not the tracking error” but the return difference. For…
Continue reading →In this article, SEBI registered fee-only advisor Swapnil Kendhe discusses if passive investing aka index investing is suitable over the next 20-30 years in India. About the author: Swapnil is a SEBI Registered Investment Advisor and part of my fee-only financial planners’ list. You can learn more about him and his service via his website,…
Continue reading →In an update to our previous reports, we find out how actively managed mid cap funds fared against Nifty Midcap 150 Total Returns Index (TRI) and factor-based index Nifty Midcap 150 Quality 50 TRI. From April 2022, our monthly equity mutual fund screener will include benchmarking against the Quality 50 mid cap index and NIfty…
Continue reading →NSE has recently changed its inclusion criterion which has allowed new companies like Paytm (One 97 Communications Ltd.), Zomato and Nykaa (FSN E-Commerce Ventures Ltd. ) to be part of the index from March 31st 2022. We had discussed what investors should do in this regard: Should I exit Nifty Next 50 because of Paytm,…
Continue reading →A reader asks, “Should investors look to reduce/eliminate exposure to Nifty Next 50 because the NSE has recently changed its inclusion criterion that has allowed new companies like Paytm (One 97 Communications Ltd.), Zomato and Nykaa (FSN E-Commerce Ventures Ltd. ) to be part of the index from March 31st 2022?” On Feb 24th 2022,…
Continue reading →Abhijit asks, “Sir, I have been investing in ICICI Nifty Next 50 Index fund for the past three years. I am shocked to learn that the index has failed to beat Nifty for the past 6 years. The higher expense ratio for these funds makes the underperformance even worse. As you have pointed out many…
Continue reading →After the publication of our review of UTI S&P BSE Low Volatility Index Fund, we have received several requests from readers to compare low volatility indices with aggressive hybrid funds/indices. Such a comparison may seem wrong at first glance. After all, how can we compare a 100% equity portfolio with a 65%-80% equity portfolio? However, a…
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