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How to choose the best or top Index fund?

Choice of the index fund should largely be based considering the 2 aspects:

1. Low expense ratio: The expense ratio is charged from investors for management of the fund and other fee etc.

2. Tracking error: This is any deviation in the fund’s return from the index return. Say there is one index fund A and another B, for index fund A- tracking error is 0.75% when compared to the benchmark and while it is 0.25% in the case of Index fund B. Then in such a situation one should definitely be opting for an index fund that has a lower tracking error or deviation from benchmark returns.

How to invest in index funds?

For investing in index funds in the case of which you can even start a SIP, STP etc. there is no requirement of having a demat account. This is true of open ended index funds and the same can be invested into via the company’s or AMC’s portal directly.

Top Index Funds With Lowest Expense Ratio:

It is to be noted that as discussed above tracking error is another important metric that investors cannot and should not overlook when betting on index funds, as closer the index fund to the index in terms of return, the more profitable shall be your investment. For now we are considering some of the top index funds that you can consider for investment basis low expense ratio. Note we are typically considering index funds that command a fund size of over Rs. 1000 crore.

Fund	Expense ratio	Absolute returns 1 year in %	Absolute returns 3 yrs in %	Absolute returns 5 yrs in %
UTI Nifty Index fund- Growth	0.29%	57.04	50.14	101.31
HDFC Index Fund- Nifty 50 Plan	0.40%	56.66	49.06	99.54
HDFC Index Fund – Sensex Plan	0.40%	53.94	50.3	103.32
Edelweiss NIFTY PSU Bond Plus SDL Index Fund 2026 – Regular Plan – Growth	0.31%	NA being a new fund

1. UTI Nifty Index fund- Growth:

The new risk-o-meter suggests the fund to carry moderately high risk. Nonetheless, it is a CRISIL 3-star rated fund that signifies average performance among peers. Fund size is Rs. 3669 crore and NAV of the fund as on June 11 is 104. This fund carries an expense ratio of 0.29%.

1-year return from the fund is 57.03 percent against Nifty 50 TRI of 57.42%, suggesting a low tracking error during the period.

Top holdings of the fund include RIL, HDFC Bank, Infosys, HDFC, ICICI Bank, TCS, Kotak Mahindra etc.

2. HDFC Index Fund- Nifty 50 Plan:

This is again a 3-star CRISIL rated fund with an asset size of Rs. 2928 crore. Risk-o-meter for the fund suggests it to be a moderately high risk bet. NAV of the fund as on June 10 is 144.5. In comparison to the Nifty TRI of 57.42% over a period of 1 year, the fund has offered a return of 56.66%. SIP investment into the fund can be started for as less as Rs. 500.

Top holdings of the fund include RIL, ICICI Bank, HDFC Bank, HDFC, Infosys, TCS, Kotak Mahindra and HUL among others

3. HDFC Index Fund – Sensex Plan:

This is again a 3-Star CRISIL rated fund. Against the benchmark SENSEX TRI of 54.7% return in the last one year, the fund has yielded return of 53.94%. Asset size of the fund is Rs. 2210 crore.

Top holdings of the fund include RIL, HDFC twins, ICICI Bank, Infosys, TCS, Kotak Mahindra Bank etc.

4. Edelweiss NIFTY PSU Bond Plus SDL Index Fund 2026 – Regular Plan – Growth

The fund is not rated by CRISIL and carries a moderate risk. The expense ratio of the fund is 0.31%. The assets under management of the fund are to the tune of Rs. 1362 crore. NAV was quoting at 10.33. The fund has over 96 percent corpus into debt securities. Notably it is a newly launched index fund that came up in March 2021

Conclusion:

Given the recent traction in mutual fund investment category and the record highs the benchmark indices in India are hitting, index funds can be the safest route to gain exposure to equity markets. In fact experts suggest an allocation of between 5-10% in Index fund in one’s mutual fund investment mix.

Disclaimer:

The views and investment tips expressed by authors or employees of Greynium Information Technologies, should not be construed as investment advise to buy or sell stocks, gold, currency or other commodities. Investors should certainly not take any trading and investment decision based only on information discussed on GoodReturns.in We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature. All readers and investors should note that neither Greynium nor the author of the articles, would be responsible for any decision taken based on these articles. Please do consult a professional advisor.

GoodReturns.in

Investment

oi-Vipul Das

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Published: Saturday, June 12, 2021, 10:50 [IST]

The private sector lender IndusInd Bank revised its fixed deposit interest rates, which are in effect from June 4, 2021. The bank now provides 2.75 per cent to 6.50 per cent on deposits maturing in 7 days to 61 months or more, after the most recent modification. IndusInd Bank pays 2.75 per cent on deposits maturing in 7 to 30 days, 3.00 per cent on deposits maturing in 31 to 45 days, and 3.50 per cent on deposits maturing in 46 to 60 days. FDs maturing in 61 to 90 days will earn 3.75 per cent, 91 to 120 days will earn 4.00 per cent, and 121 to 180 days will earn 4.50 per cent. On maturity between 181 and 210 days and 211 days to 269 days, IndusInd Bank offers a 5% and 5.25% interest rate.

For deposits maturing in 270 days to 364 days, the bank is now giving an interest rate of 5.50%. 6.00 per cent interest is paid on FDs with maturities ranging from one to two years. Deposits maturing in two years to less than three years now pay 6.50 per cent interest. The interest rate on the IndusInd tax saving scheme is 6.00%. Senior folks can benefit from IndusInd Bank’s higher interest rates. Senior folks receive a 0.50 per cent higher interest rate from the bank. For elderly folks, the current IndusInd Bank FD rates vary from 3.25 per cent to 7.00 per cent.

IndusInd Bank FD Rates (Below Rs 2 Cr)

Check revised interest rates on fixed deposit of IndusInd Bank here:

Tenure	Regular FD Rates In %	Senior Citizen FD Rates In %
7 days to 14 days	2.75	3.25
15 days to 30 days	2.75	3.25
31 days to 45 days	3.00	3.50
46 days to 60 days	3.50	4.00
61 days to 90 days	3.75	4.25
91 days to 120 days	4.00	4.50
121 days to 180 days	4.50	5.00
181 days to 210 days	5.00	5.50
211 days to 269 days	5.25	5.75
270 days or 354 days	5.50	6.00
355 days or 364 days	5.50	6.00
1 Year to below 1 Year 6 Months	6.00	6.50
1 Year 6 Months to below 1 Year 7 Months	6.00	6.50
1 Year 7 Months to below 2 Years	6.00	6.50
2 years to below 2 years 6 Months	6.50	7.00
2 years 6 Months to below 2 years 9 Months	6.50	7.00
2 years 9 Months to below 3 years	6.50	7.00
3 years to below 61 months	6.00	6.50
61 months and above	6.00	6.50
Indus Tax Saver Scheme (5 years)	6.00	6.50
Source: IndusInd Bank, W.e.f. June 4, 2021

Note

Recently, Bandhan Bank and Yes Bank have also revised interest rates on fixed deposit. For deposits maturing in 7 days to 10 years, the private sector lender Bandhan Bank is giving an interest rate of 3.00% to 5.00% which are in effect from June 7, 2021. Whereas on the other hand, Yes Bank has also revised the interest rate on its term deposits, effective from June 3, 2021. For deposits maturing in 7 days to 10 years, the bank is currently providing an interest rate of 3.25% to 6.50% respectively after the most recent adjustment.

Story first published: Saturday, June 12, 2021, 10:50 [IST]