This is the archive of all our articles related to how index investing or passive investing
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…
Continue reading →UTI S&P BSE Low Volatility Index Fund is an open-ended scheme tracking the S&P BSE Low Volatility TRI. In this review, we evaluate the pros and cons of investing in this fund currently in its new fund offer period. Regular readers may be aware that we have proclaimed the benefits of low volatility investing for…
Continue reading →In this article, we compare the performance of the Nifty 100 Low volatility 30 Total Return Index with the Nifty 50 Total Return Index. The 5-year and 10-year return differences between these indices are currently at an all-time low. The Nifty 100 low volatility 30 index consists of 30 large cap stocks from the Nifty…
Continue reading →In response to our FAQ on index investing, a viewer on our YouTube channel asks, “I am doing sip for the past one year in nifty50 and nifty next 50. Is frequent(once in a year) rebalancing necessary even for passively managed funds?” While index funds remove the need for frequent fund performance review, they cannot…
Continue reading →In this article, we discuss some frequently asked questions on index investing aka passive investing. First the basics. A passive fund is a mutual fund that tracks the stocks in a given index. The fund manager of a passive fund does not make any stock/bond selection on their own. There are two types of passive…
Continue reading →The Nifty Total Market Index consists of 750 stocks covering large, mid, small and microcap segments with stock weights determined by free-float market capitalization. The NSE launched this index in Oct 2021 with a backtested history up to April 2005. This article compares the rolling returns of the Nifty Total Market Index and Nifty 50…
Continue reading →The March 2020 crash has been a turning point for midcap stocks. The stock universe represented by Nifty Midcap 150 was on the downtrend from early 2018 has zoomed past Nifty 50 and Nifty Next 50 indices. Long-term Nifty Midcap 150 TRI returns (including dividends) are higher than Nifty Next 50 TRI returns for the…
Continue reading →Let us discuss a question from a reader who prefers anonymity: “Is it ok to invest in 50% index funds (passive funds) and 50% active funds for the equity portfolio in my retirement portfolio?” The answer depends on what the motives behind such an allocation are. This discussion applies to any mix of active funds…
Continue reading →A reader asks, “Dear Pattu Sir, as pointed out by you several times, active large cap funds have struggled to beat the Nifty/Sensex over the last few years. Although things are a little better after the market recovery in the last few months, will this be the norm in the future too? Does this mean…
Continue reading →In this article, we review a new index from NSE. The Nifty Microcap 250 Index has 250 companies beyond the Nifty 500, with weights determined in terms of free-float market capitalization. That is, any stock part of the Nifty 500 will not be part of this new index. Companies ranked within the top 1000 based…
Continue reading →In this article, we discuss why it does not make sense to invest in an index fund that does not track the top 100 stocks or lesser weighted by market capitalization. In other words, not all index funds are the same! We shall not discuss ETFs here as they come with their own problems of…
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