[SideView]

Guys i see in the thread that index funds are recommended.

But doing some research I didnt find any 5* rated funds (hdfc showing 4*) and 10 year returns are more or less in 12% range.

What is it that I am missing here? Trying to setup something for my kid so 15 years+ investment horizon.

[anandhsub]

Originally Posted by SideView

Guys i see in the thread that index funds are recommended.

Index funds mainly help in avoiding some survivorship biases and getting stuck in funds that were long term outperformers but then start underperforming and there is no tax efficient way to get out of them.

I have bad experiences with HDFC balanced and then Axis ELSS post which I shifted my large cap investments to nifty50 and next 50.

I believe there is still alpha left in the small or even mid cap segment hence recommend active mutual funds for flexicap or small cap allocation.

[SmartCat]

Originally Posted by SideView

But doing some research I didnt find any 5* rated funds (hdfc showing 4*)

They are probably not rated because all index funds are like this:



Differences if any will be minor, because of tracking error or fund management fee. So just a pick an index fund from a well-known fund house and it will be fine.

10 year returns are more or less in 12% range. What is it that I am missing here?

That's what NIFTY returned over the past 10 years. It is a good idea to diversify by adding a few actively managed funds. If you prefer index investing, there are index funds that track midcaps/smallcaps too

[warrioraks]

Originally Posted by SideView

Guys i see in the thread that index funds are recommended.

But doing some research I didnt find any 5* rated funds (hdfc showing 4*) and 10 year returns are more or less in 12% range.

What is it that I am missing here? Trying to setup something for my kid so 15 years+ investment horizon.

Do not look at the past returns to measure the future. You have a large time horizon which is perfect for equity investment. Calculate your financial goal at the end of 15 years and back track your SIP contributions from that at a 10% XIRR.

Indexes come in a lot of size and shapes. Take 2-3 from the attached list and let the compounding happen. General advice is to avoid sectoral and thematic indexes.

[tasty911]

Originally Posted by SideView

Guys i see in the thread that index funds are recommended.

But doing some research I didnt find any 5* rated funds (hdfc showing 4*) and 10 year returns are more or less in 12% range.

Index funds are meant to track a particular market index. For example, NIFTY 50 tracks the top 50 stocks in NIFTY. Similarly NIFTY NEXT 50 tracks the 50 after excluding the first 50. There are a bunch of other ones broad based as well as sectoral. Have a look here: https://www.niftyindices.com/
So first decide which market index you want to use then find a Index fund which track that index. Next look of tracking error and expense ratio. You want to pick one with lowest tracking error and expense ratio.

Personally, I also look at those with total assets above 500Cr and avoid sectoral funds.

Avoid looking at ratings, unless you know and understand what the underlying metrics are which the rating website is using.

[JMaruru]

Originally Posted by tasty911

Index funds are meant to track a particular market index. For example, NIFTY 50 tracks the top 50 stocks in NIFTY. Similarly NIFTY NEXT 50 tracks the 50 after excluding the first 50.

What is the criteria for the stock to be in Nifty NEXT 50? Who selects this list of stocks?

[deepak_misra]

Originally Posted by warrioraks

Do not look at the past returns to measure the future. You have a large time horizon which is perfect for equity investment. Calculate your financial goal at the end of 15 years and back track your SIP contributions from that at a 10% XIRR.

It is better to be more conservative and assume 8% returns. What is more important is to have an asset allocation strategy in place and start shifting from equity to more fixed income as you approach your goal.
For a 15 year goal you could start with an allocation of 20% debt and 80% equity and start reducing equity and shifting to debt.
In my opinion 2-3 years before the goal, you should be at closer to 100% safe debt.

[warrioraks]

Originally Posted by deepak_misra

It is better to be more conservative and assume 8% returns.

There is no right number here. But at 8% returns, the risk-reward for equity stops making sense when GILTs can give you 7% risk free ROI.

Originally Posted by deepak_misra

What is more important is to have an asset allocation strategy in place and start shifting from equity to more fixed income as you approach your goal.
..... In my opinion 2-3 years before the goal, you should be at closer to 100% safe debt.

Solid advice

Originally Posted by JMaruru

What is the criteria for the stock to be in Nifty NEXT 50? Who selects this list of stocks?

Available here https://www.niftyindices.com/Methodo...ty_Indices.pdf

[akhil_007]

Originally Posted by tasty911

Index funds are meant to track a particular market index. For example, NIFTY 50 tracks the top 50 stocks in NIFTY. Similarly NIFTY NEXT 50 tracks the 50 after excluding the first 50. There are a bunch of other ones broad based as well as sectoral. Have a look here: https://www.niftyindices.com/
So first decide which market index you want to use then find a Index fund which track that index. Next look of tracking error and expense ratio. You want to pick one with lowest tracking error and expense ratio.
.

Thank you for the great post! Learnt something new today.

Sorry for the noob question. I am unable to find out which MF house offers index fund that I am looking for. Ex: I am interested in "Nifty Midcap Select" but I could not locate it in UTI MF,Kuvera or ICICI MF. Would they be named differently ?

[vijaykr]

Originally Posted by akhil_007

Sorry for the noob question. I am unable to find out which MF house offers index fund that I am looking for. Ex: I am interested in "Nifty Midcap Select" but I could not locate it in UTI MF,Kuvera or ICICI MF. Would they be named differently ?

Is "Nifty Midcap Select" a specific index fund name you're looking for or are you looking for a list of index funds in general? I found one such for the latter in the below link - https://www.nseindia.com/products-se...es-index-funds

But all the popular finance required websites should allow you to filter for index funds from which you should be able to pick one you want to consider investing in.

[akhil_007]

Originally Posted by vijaykr

Is "Nifty Midcap Select" a specific index fund name you're looking for or are you looking for a list of index funds in general? I found one such for the latter in the below link - https://www.nseindia.com/products-se...es-index-funds

But all the popular finance required websites should allow you to filter for index funds from which you should be able to pick one you want to consider investing in.

Thank you for sharing the link.

I am looking for a specific fund that tracks Nifty Midcap Select index. If you look at the screenshot below,there is an index called "Nifty Midcap Select" which I have highlighted. I am looking to invest in a fund that closely tracks this Index.

,


An analogy would be if I want to invest in Nifty 50 Index, UTI offers a fund called "UTI Nifty 50 Index Fund". So, would there be any fund called "XXX Nifty Midcap Select Fund" or do I need to look for it in some other way?

[yosbert]

Originally Posted by akhil_007

I am looking for a specific fund that tracks Nifty Midcap Select index.

It seems none of the AMCs have a fund tracking that particular index.
The reasons for this are not too hard to guess, I suppose. A focused group of 25 companies for an index is kind of counter intuitive. Why go for an index fund and then limit it to 25 companies only?

[Fx14]

Originally Posted by akhil_007

I am interested in "Nifty Midcap Select" but I could not locate it in UTI MF,Kuvera or ICICI MF.

ICICI Prudential MF has an ETF tracking this index. Search for "MIDSELIETF" in scrip.

[Fx14]

Originally Posted by yosbert

It seems none of the AMCs have a fund tracking that particular index.
The reasons for this are not too hard to guess, I suppose. A focused group of 25 companies for an index is kind of counter intuitive. Why go for an index fund and then limit it to 25 companies only?

On the contrary, you'd be surprised to know that there are multiple Index Fund options offered by the AMCs for you to choose :
1. Midcap 150
2. Midcap 50
3. Midcap 150 Momentum 50
4. Midcap 150 Quality 50
5. Smallcap 250
6. Smallcap 50
7. Smallcap 250 Momentum 50
8. Smallcap 250 Quality 50

Of late, there have been Index funds launched like 'MidSmallcap 400 Momentum Quality 100'.

The list keeps expanding .

[yosbert]

Originally Posted by Fx14

On the contrary, you'd be surprised to know that there are multiple Index Fund options offered by the AMCs for you to choose :
1. Midcap 150
2. Midcap 50
3. Midcap 150 Momentum 50
4. Midcap 150 Quality 50
5. Smallcap 250
6. Smallcap 50
7. Smallcap 250 Momentum 50
8. Smallcap 250 Quality 50

Of late, there have been Index funds launched like 'MidSmallcap 400 Momentum Quality 100'.

The list keeps expanding .

You seem to have misunderstood the point I was trying to make. Of course there has been an explosion of Index funds being offered by AMCs of late. What I was trying to say was that you generally go for Index funds to broad base your investments and capture the overall market for a particular segment/strategy. Hence going for a focused group of 25 companies (as Nifty Midcap Select Index is) is kind of counter-intuitive.