Navi Mutual Fund on August 22, 2023, announced the launch of its Navi S&P BSE Sensex Index Fund, an open-ended fund that will replicate and track the S&P BSE Sensex Index.
The minimum application amount in Navi S&P BSE Sensex Index Fund is Rs 10. NFO runs from August 22, 2023 to September 1, 2023.
With a TER of 0.14 per cent, the Navi S&P BSE Sensex Index Fund has the lowest cost across all Sensex index funds and active large funds, the fund house claims. The average TER of other Sensex index funds is 0.22 per cent while that of active large cap funds is 0.9975 per cent as of August 1, 2023, the fund house said citing the Association of Mutual Funds in India (AMFI) data.
The fund will invest in 30 of the largest and financially sound companies listed on the Bombay Stock Exchange (BSE) across key sectors of the Indian economy, the release said. The scheme intends to allocate 95 per cent to 100 per cent in equity instruments and 0 per cent to 5 per cent in debt and money market instruments.
Index Funds: Who Can Consider Investing?
An index fund replicates an index (e.g., Sensex 50 or Nifty 500) without any active stock selection. The fund manager's main task is to minimize tracking error, ensuring the fund's performance closely matches the index. So there is no research on stock selection and less participation of fund managers, thus reducing expense. So investors who are searching for investment opportunities with low associated costs can consider this fund.
Over the course of its history, the companies in S&P BSE Sensex Index have demonstrated impressive performance metrics. The index’s compound annual growth rate (CAGR) for the past years shows that it grew 17.03 per cent for one year, 22.38 per cent for three years, and 14.61 per cent in a decade, the release said.
However past returns is not a guarantee for future returns. Investors should conduct research and consider investment goals before investing in any mutual funds.
