Amidst stock market fluctuations and economic uncertainty, the stability of index funds has shone through, making them a popular choice. With their low risk and stable returns, these funds have become a beacon of security for many investors.
Index funds are designed to replicate market index performance. They offer a diversified investment approach with low expense ratios, which makes them appealing to investors.
These funds, whether mutual or exchange-traded, offer a straightforward investment approach. By specifically investing in a market index, such as Nifty-50 and Sensex, they eliminate the need for complex investment decisions, providing investors with a sense of ease.
As the indices rise, so do returns, and fees are generally lower than managed funds, reducing the burden on investors.
Here are some recommended index funds for 2024:
1. ICICI Prudential Nifty 50 Index Direct Plan-Growth: This fund mirrors the performance of Nifty 50, comprising 50 large-cap companies with high liquidity. It has an expense ratio of just 0.17% and has provided returns of 16.34% in the last three years. The minimum investment for SIP is Rs. 100.
2. Motilal Oswal Nifty Small Cap 250 Index Fund Direct-Growth: Investors seeking higher risk and focus on small-cap companies can consider this fund, which consists of 250 small-cap companies with the lowest market capitalization in the Nifty 500. It has returned 33.64% in the last three years, with a minimum SIP investment of Rs. 500 SIP and an expense ratio of 0.36%.
3. Nippon India Nifty Small Cap 250 Index Fund Direct-Growth: Similar to the above fund, this one also holds stocks of Nifty 250 small-cap companies with a minimum SIP investment of Rs. 1000. It has provided returns of 33.50% in the last three years and has an expense ratio of 0.32%.
4. DSP Nifty 50 Equal Weight Index Fund Direct-Growth: This fund equally invests in companies in the Nifty 50, providing a unique approach and steady growth. With a minimum SIP investment of Rs. 100, it has returned 22.94% in the last three years and has an expense ratio of 0.40%.
5. Canara Robeco Small Cap Fund Direct-Growth: Investors seeking high growth potential in small-cap companies can consider this fund, which has returned 37.33% in the last three years. However, it carries high risk. The minimum SIP investment is Rs. 1000, and the expense ratio is 0.44%.
Remember, this article is for informational purposes only. While index funds offer stable returns with low risk, investment in mutual funds carries market risk. It’s always wise to seek expert advice before making investment decisions, ensuring you feel guided and confident in your choices.