{"id":2005051,"date":"2014-09-25T15:01:48","date_gmt":"2014-09-25T09:31:48","guid":{"rendered":"http:\/\/stockviz.biz\/index.php\/?p=2005051"},"modified":"2014-09-25T15:31:39","modified_gmt":"2014-09-25T10:01:39","slug":"index-funds-trying-beat-index","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2014\/09\/25\/index-funds-trying-beat-index\/","title":{"rendered":"Are Index Funds trying to beat the Index?"},"content":{"rendered":"<p>Ideally, Index Funds should just track an index. Its the holy-grail of passive indexing &#8211; don&#8217;t try to be smart picking stocks, just invest in an index tracking fund and let the market work for you. Index Funds are supposed to only focus on reducing tracking error and fees. The NIFTYBEES ETF does the job pretty well:<\/p>\n<p><a target=\"_blank\" href=\"http:\/\/stockviz.biz\/etf?TICKER=NIFTYBEES\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/NIFTYBEES.png\" alt=\"NIFTYBEES\" width=\"1000\" height=\"800\" class=\"alignnone size-full wp-image-2005061\" srcset=\"https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/NIFTYBEES.png 1000w, https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/NIFTYBEES-300x240.png 300w, https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/NIFTYBEES-375x300.png 375w, https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/NIFTYBEES-900x720.png 900w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/a><\/p>\n<p>Since 2005-01-03, Goldman &#8211; Nifty ETF has returned a cumulative 275.22% vs. CNX NIFTY&#8217;s cumulative return of 278.36%. Chalk up the difference to asset management fees. But the story with Index Funds offered by leading AMCs is a head scratcher.<\/p>\n<h3>IDFC  Nifty Fund<\/h3>\n<p>Since 2010-05-03, IDFC Nifty Fund-Regular Plan-Growth has returned a cumulative 61.17% vs. CNX NIFTY&#8217;s cumulative return of 51.62%.<\/p>\n<p><a href=\"http:\/\/stockviz.biz\/FundCompare\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/IDFC-nifty.png\" alt=\"IDFC nifty\" width=\"1000\" height=\"800\" class=\"alignnone size-full wp-image-2005081\" srcset=\"https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/IDFC-nifty.png 1000w, https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/IDFC-nifty-300x240.png 300w, https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/IDFC-nifty-375x300.png 375w, https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/IDFC-nifty-900x720.png 900w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/a><\/p>\n<h3>LIC NOMURA MF Nifty Index Fund<\/h3>\n<p>Since 2010-01-04, LIC NOMURA MF Index Fund-Nifty-Growth has returned a cumulative 54.78% vs. CNX NIFTY&#8217;s cumulative return of 52.95%.<\/p>\n<p><a href=\"http:\/\/stockviz.biz\/FundCompare\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/lic-nifty.png\" alt=\"lic nifty\" width=\"1000\" height=\"800\" class=\"alignnone size-full wp-image-2005071\" srcset=\"https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/lic-nifty.png 1000w, https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/lic-nifty-300x240.png 300w, https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/lic-nifty-375x300.png 375w, https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/lic-nifty-900x720.png 900w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/a><\/p>\n<h3>Taurus Nifty Index Fund<\/h3>\n<p>Since 2010-06-21, Taurus Nifty Index Fund &#8211; Growth Option has returned a cumulative 46.82% vs. CNX NIFTY&#8217;s cumulative return of 52.06%. <em>Oops!<\/em><\/p>\n<p><a href=\"http:\/\/stockviz.biz\/FundCompare\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/taurus-nifty.png\" alt=\"taurus nifty\" width=\"1000\" height=\"800\" class=\"alignnone size-full wp-image-2005091\" srcset=\"https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/taurus-nifty.png 1000w, https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/taurus-nifty-300x240.png 300w, https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/taurus-nifty-375x300.png 375w, https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/taurus-nifty-900x720.png 900w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/a><\/p>\n<h3>IDBI NIFTY Index Fund<\/h3>\n<p>Since 2010-06-30, IDBI NIFTY Index Fund Growth has returned a cumulative 49.48% vs. CNX NIFTY&#8217;s cumulative return of 52.25%. <\/p>\n<p><a href=\"http:\/\/stockviz.biz\/FundCompare\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/IDBI-Nifty.png\" alt=\"IDBI Nifty\" width=\"1000\" height=\"800\" class=\"alignnone size-full wp-image-2005101\" srcset=\"https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/IDBI-Nifty.png 1000w, https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/IDBI-Nifty-300x240.png 300w, https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/IDBI-Nifty-375x300.png 375w, https:\/\/portalvhds29z8xdrqhczq.blob.core.windows.net\/wordpress\/2014\/09\/IDBI-Nifty-900x720.png 900w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/a><\/p>\n<h3>Question<\/h3>\n<p>If the <a href=\"http:\/\/stockviz.biz\/ETF?TICKER=NIFTYBEES\" title=\"NIFTYBEES ETF\" target=\"_blank\">NIFTYBEES ETF<\/a> can track the index with a 0.09% tracking error and an expense ratio of 0.5%, why would anybody invest in any of the NIFTY Index Funds?<\/p>\n<p>You can run the comparison tool here: <a href=\"http:\/\/stockviz.biz\/FundCompare\" title=\"Compare mutual funds\" target=\"_blank\">FundCompare<\/a><br \/>\n&nbsp;<br \/>\n&nbsp;<br \/>\n&nbsp;<\/p>\n<div class=\"row-fluid well well-small\">\n                Please don&#8217;t treat the information here as investment advice.<br \/>\n                If you want advice on investing in mutual funds, please get in touch with <a href=\"http:\/\/stockviz.biz\/2012\/11\/28\/about-us\/\" title=\"About Shyam\">Shyam<\/a>.<br \/>\n                You can either WhatsApp him or call him at <a href=\"tel:08026650232\" title=\"Land Line\">080-2665-0232<\/a>.<br \/>\n                He is an AMFI registered IFA who can advice you on HDFC, ICICI Pru, UTI and Birla Sun Life funds.\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Ideally, Index Funds should just track an index. Its the holy-grail of passive indexing &#8211; don&#8217;t try to be smart picking stocks, just invest in an index tracking fund and let the market work for you. Index Funds are supposed to only focus on reducing tracking error and fees. The NIFTYBEES ETF does the job &hellip; <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3471,9],"tags":[17],"class_list":["post-2005051","post","type-post","status-publish","format-standard","hentry","category-investing-insight","category-your-money","tag-mutual-funds","entry"],"_links":{"self":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/2005051","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/comments?post=2005051"}],"version-history":[{"count":0,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/2005051\/revisions"}],"wp:attachment":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/media?parent=2005051"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/categories?post=2005051"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/tags?post=2005051"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}