Top index investment funds:Investment funds have proven to be a good investment choice over the past ten years because of their good returns. No matter how good returns they can deliver, mutual funds are always subject to market risk. A mutual fund that is outperforming today could fail if the companies in which it has invested its money start to perform poorly. So for investors with a lower risk appetite who are looking for investments that are less sensitive to market performance, index funds have proven to be a good investment choice.
As the name suggests, index funds reflect the market indices they track. For example, if an index fund mirrors the Nifty 50 benchmark, it will invest its money in the Nifty 50 companies.
So, the returns that the index fund would deliver will be the same or slightly different from the performance of the Nifty50 benchmark.
NSE Nifty and BSE Sensex are the most popular indices for mutual fund investments.
Adhil Shetty, CEO of BankBazaar.com, says, "Direct investing in equity markets is also very risky for the average retail investor who has no idea what and when to buy, hold or sell. That's why we say index investing is good enough." way for the common man or woman to invest in the stock markets. The job of an index fund is simply to mimic market indices like the Nifty 50 or the Sensex, which have generated an average annual return of almost 13% over the last ten years. If you had Rs 1,000 in a Nifty 50 fund every month during this period invested, you would have a corpus of about Rs 2.32 lakh out of a total investment of Rs 1.2 lakh.”
Shetty adds, “Your money is mainly invested in corporate giants in India who are extremely good at controlling costs and generating profits.”
Santosh Joseph, founder and managing partner of Refolio Investments and Germinate, says index funds are the "ideal" funds for the long term. “It is a passive fund. It is a type of predetermined investment because the investment curve is dynamically managed based on how an index is constructed. Therefore, for most investors, this is a no-activity investment path; it is passive play. "
He further adds, “The need to participate in the markets without being actively involved is what index funds solve for investors.”
Some advantages of index investing in investment funds can be:
- Because they are diversified, they reduce the risk associated with your portfolio.
- They have a low expense ratio, which increases the return on your investment in the long term.
- Because most companies in major indexes have a large market value and stable results, index funds are also fairly stable funds.
In this article we take you through the performance of the index funds that have achieved the best returns over the past three years.
Top 5 index funds of the past 3 years
Motilal Oswal Nifty Smallcap 250 Index Fund Direct - Groei
With an annual return of 35.08 percent in the last three years, Motilal Oswal Nifty Smallcap 250 Index Fund Direct - Growth tops the list of index funds.
This is higher than the category average of 34.84 percent in the same period.
The net asset value (NAV) of the growth option for the Direct plan was Rs 28.93 on November 17, while the expense ratio for the Direct plan was 0.36 percent on October 31.
The fund had assets under management (AUM) of Rs 499.78 as on November 17.
The minimum investment required for the fund is Rs 500 while the minimum SIP investment is also Rs 500.
An SIP of Rs 10,000 per month would have earned you Rs 5.40 lakh over three years.
Nippon India Nifty Smallcap 250 Index Fund Direct - Groei
This small-cap fund ranks second on the list with an annualized return of 35.03 percent over the three years.
The net asset value of the direct plan under the growth option was Rs 25.86 on November 17.
The fund with Rs 799.23 crore AUM had an expense ratio of 0.32 percent under its direct plan as of October 31.
The minimum investment, minimum additional investment and SIP investment are Rs 100 each.
An investment of Rs 10,000 in SIP every month would have given you a return of Rs 5.40 lakh in three years.
Motilal Oswal Nifty Midcap 150 Index Fund Direct - Groei
This mid-cap index fund has achieved a return of 30.54 percent over the past three years.
With a fund size of Rs 1,111.99 crore as on November 17, the fund had a NAV size of Rs 27.97 for the growth option of its Direct Plan.
The cost percentage of the Direct subscription as of October 31 was 0.3 percent.
The minimum investment, minimum additional investment and minimum SIP investment for the fund is Rs 500 each.
An investment of Rs 10,000 in SIP per month would have converted into Rs 5.24 lakh.
DSP Nifty 50 Equal Weight Index Fund Direct - Groei
The large index fund has achieved an annual return of 23.62 percent over the three-year period.
The fund's assets under management stood at Rs 834.45 crore as on November 17, while the NAV size of the Direct plan stood at Rs 19.86 as on November 17.
The fund's Direct plan has an expense ratio of 0.4 percent.
The minimum investment, minimum investment and minimum investment in SIP for the plan is Rs 100 each.
If someone had started investing Rs 10,000 in SIP every month three years ago, they would have gotten Rs 4.68 lakh today.
Sundaram Nifty 100 Equal Weight Fund Direct-Growth
This index fund has achieved an annual return of 19.91 percent. the past three years.
The fund had assets under management of Rs 65.55 crore and the NAV size of the direct option for its growth plan was Rs 132.93, both as on November 17.
The fund's direct plan had an expense ratio of 0.57 percent. as of October 31.
The minimum investment, minimum investment and minimum investment in SIP for the plan is Rs 100 each.
A SIP investment of Rs 10,000 per month for three years would have earned you Rs 4.44 lakh.
