What is a Nifty Index Fund?Ī nifty Index fund is a mutual fund scheme that tracks the Nifty 50 index by investing in stocks of companies comprising Nifty 50 and endeavor to achieve return equivalent to Nifty 50 Index by “passive” investment strategy. This article aims to discuss Nifty Index Funds in detail. Here, an Index Fund which is replicating Nifty 50 Index, can be of great help. Further, an investor needs to continuously track the underlying index for any changes. Such a strategy calls for a higher amount of capital. Since Nifty 50 Index is not a security by itself, the investors must purchase all the constituent stocks with similar weightage to have a similar investment exposure. Nifty 50, is a basket of 50 large & liquid companies from various sectors and is primarily considered to be synonymous with the Indian equity markets.
are preferred choice which helps in giving the asset class exposure. Generally, broad market indices like Nifty 50 etc. Within the passive investment strategy, investors need to make an investment decision to choose the underlying benchmark index. As such, passive investing helps investors mitigate the unsystematic risk in their investment strategy. On the hand when a scheme adopts a passive investing strategy the fund manager needs to passively replicate the portfolio of underlying index it aims to replicate and this is done by buying or selling the stocks which are forming part of an index and that to almost in same proportion. When a scheme is actively managed, the fund manager actively decides in which stock to invest and in what proportion to invest. In contrast, passive investing refers to tracking a benchmark index and replicating its composition in the portfolio. Active investing refers to the active selection of stocks in the portfolio depending upon company fundamentals and other parameters. Investors may choose to invest in the equity markets through two primary investment strategies – active investing and passive investing.
Investors Updates/ Presentations/ Conference Calls.AMC seed capital Investment in MF schemes.Compensation paid in form of mutual fund units.
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