Broader Index funds available in India but confused about expense ratios.

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Topic Author
monu
Posts: 8
Joined: Wed Mar 06, 2019 1:27 am

Broader Index funds available in India but confused about expense ratios.

Post by monu » Sun Nov 17, 2019 10:11 am

Recently, Axis Asset Management has launched Nifty 100 index fund with expense ratio of 0.16% and Motilal Asset Management has launched Nifty 500 index fund with 0.38% expense ratios. The top 100 stock find is cheaper but less driverless while top 500 stock find is expensive but more diversified. Any help in choosing? Keep in mind that top 50 stock find is even cheaper at 0.10%. it's very confusing which the choose.

MotoTrojan
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Joined: Wed Feb 01, 2017 8:39 pm

Re: Broader Index funds available in India but confused about expense ratios.

Post by MotoTrojan » Sun Nov 17, 2019 11:19 am

These indices are of Indian based stocks (NSE). While you may want to hold some, by market cap this is only about 1.1% of the world's public equity market. It would be a significant uncompensated risk to hold all of your equity investment in any of these indices.

I would probably go with the 100 option based on the expense ratio differences, but I would strongly suggest you look to find some global equity exposure, or even just US equities if that is easier to obtain.

gotester2000
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Joined: Sun Nov 12, 2017 1:59 am

Re: Broader Index funds available in India but confused about expense ratios.

Post by gotester2000 » Sun Nov 17, 2019 11:46 am

Nifty 50 index fund is the oldest and best choice. The index is around for years and there a few good fund choices there with ER of 0.1% in direct mode.
Nifty 100 = Nifty 50 + Nifty next 50. Not worth the extra volatility of the next 50.
Nifty 500 ??? ☺ - Innovations will keep coming up.

Topic Author
monu
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Joined: Wed Mar 06, 2019 1:27 am

Re: Broader Index funds available in India but confused about expense ratios.

Post by monu » Sun Nov 17, 2019 12:07 pm

There is even the option of investing in bottom 50 stocks of Nifty 100 called Nifty Next 50 with expense of 0.27%. That one is extremely volatile but most rewarding of all. Nifty 500 index fund has very short track record but it's quite close to the benchmark. 0.38% expense will kill the record in very long term.

Topic Author
monu
Posts: 8
Joined: Wed Mar 06, 2019 1:27 am

Re: Broader Index funds available in India but confused about expense ratios.

Post by monu » Sun Nov 17, 2019 12:13 pm

We have a NASDAQ 100 index fund of fund i.e. it's an mutual fund which in turn investing in NASDAQ 100 ETF. It has two layers of expenses viz. 0.1% for the fund and some 0.40% for the underlying ETF. Is it worth it?

CarpeDiem22
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Joined: Tue May 22, 2018 11:20 pm

Re: Broader Index funds available in India but confused about expense ratios.

Post by CarpeDiem22 » Wed Dec 11, 2019 7:02 am

ICICI BSE 500 ETF is available at 0.29% expense ratio if you want to go that route.

Nippon Nifty 50 ETF (0.05% expense) and Nippon Nifty Next 50 ETF (0.15% expense) in ratio of 87:13 will give you same exposure as Nifty 100 ETF or fund at a cost of 0.063% expense ratio.

Nasdaq 100 ETF cost is 0.54% and not 0.40%

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