Updated December 18th, 2023 at 14:36 IST
Optimal index funds for risk-averse investors: Top performers over the past 3 years
Motilal Oswal's Nifty Smallcap 250 Index Fund - Growth leads at 35.08%, with Nippon India's counterpart at 35.03% in three years.
- 3 min read
Index mutual funds are now a go-to for risk-averse investors aiming for stability and decent returns. Experts note that these funds, mirroring benchmark indices, provide a low expense ratio and diversification, effectively mitigating portfolio risks.
Why index funds?
Experts emphasise the suitability of index funds for those with a lower risk appetite, providing an avenue to invest in the stock market without the intricacies of direct stock market involvement. Aastha Gupta, CEO, Share India Fincap, applauds index funds as an ideal long-term investment, describing them as a passive and pre-determined nature of investing.
Benefits of Index Mutual Funds
Since they are diversified, they reduce the risk associated with your portfolio. They have a low expense ratio, so it adds to the returns you receive on your investment in the long run. "Since most of the companies in major indexes have a large market capitalisation and stabilised performance, index mutual funds are also stable funds to quite a large extent," Gupta added.
Top 5 index mutual funds in last 3 years
Ravi Singh, market expert, and Aastha Gupta, CEO, Share India Fincap, suggest the top 5 index mutual funds based on their performance in the last 3 years.
Motilal Oswal Nifty Smallcap 250 Index Fund Direct - Growth: With 35.08 per cent annualised returns in the three years, this fund tops the list and has outperformed the category average of 34.84 per cent in the same period. The net asset value (NAV) size for its Growth option of the Direct plan was Rs 28.93 as of November 17, while the expense ratio was 0.36 per cent for the direct plan as of October 31. The fund was holding an asset under management (AUM) of Rs 499.78 crore as of November 17.
Nippon India Nifty Smallcap 250 Index Fund Direct - Growth: This small-cap fund comes second in the list with an annualised return of 35.03 per cent in the three years. The NAV size for its Direct plan under the Growth option was Rs 25.86 as of November 17. The fund with Rs 799.23 crore AUM had an expense ratio of 0.32 per cent under its Direct plan as of October 31.
Motilal Oswal Nifty Midcap 150 Index Fund Direct - Growth: This mid-cap index fund has given 30.54 per cent returns in the last three years. With a fund size of Rs 1111.99 crore as of November 17, the fund had a NAV size of Rs 27.97 for the Growth option of its Direct Plan. The expense ratio for its Direct plan as of October 31 was 0.3 per cent.
DSP Nifty 50 Equal Weight Index Fund Direct - Growth: The large-cap index fund has given 23.62 per cent annualised returns in the three-year period. The fund's AUM as of November 17 was Rs 834.45 crore, while the NAV size for the Direct plan was Rs 19.86 as of November 17. The fund's Direct plan has an expense ratio of 0.4 per cent.
Sundaram Nifty 100 Equal Weight Fund Direct- Growth: This index fund has given annualised returns of 19.91 per cent in the last three years. The fund had an AUM of Rs 65.55 crore, and the NAV size for the Direct option of its Growth plan was Rs 132.93, both as of November 17. The fund's direct plan had an expense ratio of 0.57 per cent as of October 31.
Index mutual funds offer a stable and low-risk investment option for individuals seeking long-term returns without active market involvement. According to experts, these top-performing funds display high annualised returns over the last three years, making them noteworthy choices for risk-averse investors.
Published November 29th, 2023 at 14:24 IST