11 Different Types of Index Funds in India | How Index Funds Work | Index Funds for Beginners
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- Опубликовано: 12 июн 2024
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Index funds are becoming a popular investment choice even in India as they offer a low-cost way to participate in the stock markets and diversify one's portfolio. But not all index funds are created equal. In fact, there are 11 different types of index funds that serve different objectives, each with their own benefits and drawbacks. In this video, I'll be discussing each of those 11 index fund types that are available for investment to investors.
We shall be looking at passively managed funds ranging from broad market index funds (like the Nifty 500), market capitalization based index funds (like the Nifty 50, Nifty Next 50, Nifty Midcap 150 etc.), equal weight index funds, hybrid index funds (within equities and also a combination of assets), sectoral index funds (like Bank Nifty, Nifty IT index etc.), thematic index funds (like healthcare, energy & consumption based), factor based index funds (like momentum, low volatility etc.), strategy index funds (like leverage, futures, beta etc.), international index funds (like the Nasdaq 100, S&P 500 index fund), bond index funds (target maturity funds) and socially responsible index funds (ESG index funds)
Each of these index funds serves a different objective and can help investors achieve different investment goals. And by understanding the different types of index funds available, you can make a more informed decision about which fund is right for you.
❤️ I hope you LIKE this video and if you do, then please SHARE it with your friends and well-wishers so that they too can receive the benefits of this knowledge. Thanks!
👉 Video Chapters:
00:00 11 Different Types of Index Funds
01:21 1. Broad Market Index Funds
02:30 2. Market Capitalization Based Index Funds
04:16 3. Equal Weight Index Funds
05:32 4. Hybrid Index Funds
07:34 5. Sectoral Index Funds
08:30 6. Thematic Index Funds
09:39 7. Factor Based Index Funds
10:56 8. Strategy Index Funds
12:15 9. International Index Funds
13:37 10. Bond Index Funds
14:44 11. Socially Responsible Index Funds (ESG)
👉 The video on Edelweiss Large and Midcap Index Fund can be accessed here: www.edelweissmf.com/Files/dow...
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Disclaimer: I am not a SEBI registered investment advisor or research analyst. The content posted on this platform is purely for educational purposes and none of it constitutes investing or trading advice. Viewers should do their own research and diligence before investing or acting on the information presented
Thanks
Thank you very much Praneeth for this kind gratuity and your appreciation.
Thanks!
Very well explained. Thanks.
Glad it was helpful!
Excellent and very informative thanks Shankar
My pleasure, thank you very much!
A very exhaustive and informative video. Thank you!
Most welcome. Glad you enjoyed it!
New information throughout the video. Thank you
Glad it was helpful!
very informative and cleared many many doubts and terminology
Glad it was useful!
Well Explanation & very informative video. Thanks sir
Most welcome, glad you found it useful
Awesome
🙌
Good Morning... Excellent
Good morning to you too. Thanks!
Excellent 👌
Thanks a lot
Thank you very much 🙏
You're most welcome, Arvind ji
Extremely informative video Shankar 👍 Also 50k subs coming up real soon. How are you feeling about that? Cheers!
Thank you very much Anup ji. 50k is a good milestone to reach .. I'll take a break this coming week (no video on Wednesday) .. that'll be an apt celebration :)
Nice video Shankar. Keep Going.
Thanks 🙌
All your videos are worthy, creative and genuine. Thanks for sharing your knowledge.
So nice of you. Thank you very much, Bikash ji. I try to do the best I can .. and I'm glad the effort is showing. It's surely a lot more tougher than what it seems.
Thank you so much sir
Most welcome
Good Insights!
Thx 🙌
Very useful and insightful. Thank you so much sir..
You are most welcome
Well explanation.ಮಸಾಲೆ ದೊಸೆ ಹರಸರು ಕೇಳಿ ಬಾಯಲ್ಲಿ ನಿರು ಬಂತ್ತು ಸಾರ.
Thanks. Tasty & cost-effective .. always enjoyed the street dosas :)
Excellent video
Thank you
When shld we use a market weighted index vs equal weight index. I think during bear market, equal weighted would be more fruitful. Your views sir?
Do the mutual fund AMCs of India offer all those index funds for the retail investors to invest ?
Hi Shankar - can you help me in finding out the best Small cap ETF which should comprise of 50-75 good quality stocks
Sir, Hybrid Index fund available? Example please. Thank you
Love your insight.
Thank you!
@@shankarnath As a content writer, I get a lot of value watching your videos. Thank you.
@@bugu0915 Happy to know the content is helping you. Wishing you the best
Thanks for your amazing and informative videos and all that you do to spread financial awareness.
Most welcome. Glad you like my work!
Thank u
Welcome
Well-explained and informative... 🎉 thanks for this video
My pleasure 😊
Hi Shankar. ..i would like to connect for financial advices and also please let me know about charges..
@@praveenkumar-lc9yx Hello Praveen. Due to paucity of time (these videos take a lot of time to create), I am not offering any consultations. Once I have a couple of hands to help, I'll be more keen on having a paid offering. Allow me a couple more months.
@@shankarnath sure and please let me know when you will be in a position to provide consultations. Thank you so much 🙂
Very informative video , may be it needs a series on performing return comparisons for these indices, merits and demerits
Thank you for the suggestion
Hello Shanker - informative as ever. I have been meaning to ask you - could you please do a video in factor based investing? Which factors (alpha, low vol, quality, momentum etc). Compare in the medium and the long-term. Would be super helpful. Thanks.
Thank you very much. Yes, I'm be doing a video on factor investing soon .. it's already in my content queue
@@shankarnath i would like the same and a detailed video on smart sip. Also please consider a scenario wherein how these funds perform over a prolonged bull run when market doesn't go through a 2008 or covid like crisis
Спасибо большое 💞
பிரமாதம் மிக்க நன்று மகிழ்ச்சி 🔱🚀
Thank you 🙌
Came by to congratulate you on 50k subs! 🎉
So nice of you. Thank you very much for your appreciation!
❤
Thanks Shankar this is very helpful. Can you please make another video with 3Y, 5Y rolling returns of some of the key indices.
Thanks for your suggestion
Thanks. Excellent video. I have made a small payment.
Thank you very much for your kind gratuity
Hi. I am currently buying Niftybees directly. Is it a good buy?
Thank you
Thanks again for another great video. Can you make a video how to use these index funds in combination and how to balance them occasionally to maximise the overall gains.
Most welcome and thanks for the suggestion
14:44 S&P BSE Carbonex; S&P BSE Greenex and S&P BSE 100 ESG are the three sustainability investing indices of BSE. #bharat #stock exchange
👌👌👌👌👌
Thank you Rajeev ji
Thanks Shankar, found it useful, request you to share your thoughts on how to go about exit strategy from MFs depending on market situations.
Most welcome and thanks for the suggestion
@@shankarnathdear,pls respond on exit and re-investment strategy ,if u may/ can ?
@ray--haan --dear, a intelligent question.I have extended your question to read as "exit & re-investment strategy",if any ?
Hi Shankar, great video as always.. I have a question, do index funds provide down side protection? Like a cash component? If not is there any reading material on how to deal with this?
Index funds go up/down just the way its corresponding index does.
Hi Nikhil - index funds have a defined methodology and they have to follow it. Unable to follow that precisely is what leads to tracking error. I'm not aware of any index fund that offers down-side protection the way you have defined it i.e. via cash cushion or use of derivatives etc.
Hi Shankar, have been following your videos for many years now, good stuff, keep it going. Question: Does it matter if I choose a ICICI nifty 50 etf v/s Axis nitfy 50 etf. Are these active managed or passive managed? I am looking for a passive managed index funds to keep my expense ratio. Is there a place where all this is documented. On a lighter note, in namma bengalore, I hope someday you will here the other person at the stall say "Guru, ondhu dose kodappa" :) :).
Thank you very much for your continued patronage and appreciation:
1. It doesn't matter to me as long as there is atleast 100 crores of AUM within the ETF. I prefer that cut-off as it improves the probability of someone dedictated looking at the management of that scheme
2. Please check the AMC website to know if any scheme is active or passive. Likewise, you can also check on valueresearchonline.com or similar platforms
hi shankar, which mutual fund or ETF do u invest in for multi cap 50:25:25 ? I couldnot find any index fund for this index
I use a mix of actively managed and passive schemes. The combination of all comes to 50-25-25. I've explained that in an earlier video; link: ruclips.net/video/bN5QdxY3RVs/видео.html
Yes, you are right. There is no 50-25-25 MF or ETF currently but there is an index (Nifty 500 Multicap 50:25:25 Index) so hopefully some fund house will come up something. For now, one has to design his or her portfolio accordingly
@@shankarnath thankyou v much for valuable info. I am binge watching your videos after i chanced upon them few days back :)
Thank you for a detailed video
Can you please let us know any defence sectoral index fund in India?
Most welcome. I have come across only an Auto index fund and a Manufacturing index fund. No defence sectoral fund per my knowledge
7:09 here you've mentioned about "fund presentation" in video description but I couldn't find it. Kindly update the description with this presentation please. Thanks for one more amazing video, god bless you.
Hello. Now, added to video's description. www.edelweissmf.com/Files/downloads/Product%20Collateral/Presentation/2022/Aug/published/Edelweiss_Large&Midcap_Index_Fund_-_August'22_23082022_073058_PM.pdf
Great Video !
Thanks!
Hello Shankar,
Is there any ETF/MF, through which I can invest into Penny stocks, for a small portion of my portfolio?
Hello, I haven't come across one yet. Apologies!
Shankar - great video again. Can you please share some funds that have equity exposure of more than 35%? This is relevant specially after the fund taxation changes which affects most international index funds I guess
Hi Sumit ji - I don't have a list but a fairly large number of schemes (maybe 700-800) have equity exposure of over 35%. This include large caps, mid caps, small caps, ELSS, aggressive hybrid, equity savings, flexi cap, thematics etc. SEBI had done a classification of fund categories a few years back which explains it: www.amfiindia.com/investor-corner/knowledge-center/SEBI-categorization-of-mutual-fund-schemes.html
Excellent
Thank you so much 😀
10:03 - Hi Shankar, thanks a lot for this! I have been following one of the factor based index - Nifty 50 Value 20 and that has really caught my eye. In the last 14 years the index has outperformed almost all actively managed funds by offering 19% CAGR to the investors. I’d like to know more about this index. I have been trying to research about the historical constituents of this index of this index over the last 14 years but have not found anything of much use. We’d really appreciate if you and the community here can share any valuable resources on this index. Thanks!
Hello. I haven't analysed specific factors for sometime now. I'll come up with a broader video on factor investing soon .. it is already in my content queue. One suggestion - please map the N50V20 on an year on year basis and see how it has performed as compared to other factors like momentum, alpha, low vol, Nifty 50 etc. That'll help you assess if there are any entry points for a factor like this
Hi Jay Patel, I beg to differ here . If you closely watch value 20 index . The base year for this index is 2009, which is right after the crash of 2008 .that's the main reason for the significant higher returns
@@9092295555 I do agree with your point that the base of this index is a time when the markets were at their lowest but there are two things that we need to look at here. 1) Nifty was also at it’s lowest in 08-09 and since then, Nifty 50 has given 12-13% return till date. So Nifty 50 also got an equal opportunity as NV20 to shine. 2) If you take any 5 year period return (Rolling 5Y CAGR) of Nifty 50 and NV20 since 2009 and compare them then you’ll observe that the median of Nifty 50 is close to 12% and NV20 median is close to 17%. There’s definitely an alpha of 4-5% with lower beta!
@@jaypatel6690dear,very logical and objective comments.
Hello Shankar sir
I m a big fan of yours
Your videos are always full of value knowledge & intellect
This is great video about mutual funds ❤
My question is
The contra fund would come under which of these 11 types
& will it be wise to start my stock mkt journey with only 2 mutual funds in my folio :
1 small cap ( nippon or sbi or axis or quant)... yet to choose AMC
2 contra fund ( sbi)
Both on SIP mode for long term 3-5 yrs
Untill now all my investments are in PPF SSY NPS & FDs
I m 44 & in Govt service
Thank you!
Hello sir, thanks for this informative video. You said you'll share the slides in video. Can't find it in description. Pls help
Hi, here's the link. www.edelweissmf.com/Files/downloads/Product%20Collateral/Presentation/2022/Aug/published/Edelweiss_Large&Midcap_Index_Fund_-_August'22_23082022_073058_PM.pdf
Hi sir, can you make a video which combination of index fund portfolio is good for beginners.
Hi. Since preferences differ from person to person .. may I request you watch my video on how I design my own equity portfolio. That will give you a lot of useful information. Video link: ruclips.net/video/bN5QdxY3RVs/видео.html
Gilt ETF ?
Informative video, thank you. Which Index Funds offer dividends? E.g. in the US stock market, Vanguard funds with tickers VOO and VIT both track the S&P 500 index but VIT offers dividends.
Most welcome. All index funds with IDCW option offer dividends.
@@shankarnath Thanks so much!
Is a thematic index fund similar to smallcase? The difference I can think of is in smallcase we still have equities
A good way to understand this is by understanding thematic funds broadly. Pls do that here: www.niftyindices.com/indices/equity/thematic-indices
Please make a video on how nav is allocated in international index fund
And does dollar purchase 20% tcs also applicable for mutual fund
Thanks for your suggestion
Thanks a lot Shankar Sir for introducing us to the Multiverse of Index funds. Please a video on regular plan small, mid & large/Midcap funds which have given more than 18% returns in past 15-20 years. It will be very welcome.
Or a detailed compare of various regular PLAN ELSS funds which have given more than 15 percent returns in past 12 to 15 years. Thanks again!
Thank you for your suggestions, Ravi. Much appreciate your kind gesture aswell
Hi Sir, could you please make a video on Mutual funds, when to exit and if one fund performs well in first year then if it gives negative returns in the next 2 year, do we need to exit. If yes means, will loose advantage of compounding effect right ?
Thank you
Thank you for your suggestion
Nice video sir, which are the ETFs for investing in banks
Thank you. You can find a list of such ETFs on a platform like valueresearchonline.com
@@shankarnath thank u sir
Any etf for small and midcap?
Yes. You'll find a few of them in your brokerage/trading a/c
Hey Shankar, is it possible to differentiate "NIfty 50" vs "Nifty 50 value 20" for long run 15-20yrs holding
Hi, sorry, didn't understand what you meant by "differentiate"? Can you please detail out the question
@@shankarnath I believe "Nifty 50 value 20" gave 18% CAGR since 2009 , in the same period "Nifty 50" gave 14% CAGR.
Is it possible to check this will be sustainable in the long run for next 20 years,
If yes can you please differentiate both the index. so that i can able decide which index i need to choose.
@@MrBharani1989 Thanks for the suggestion; I will add it to my content queue. Since the queue is already quite long, please allow me some time to circle back on this. Alternatively, I have made one of Nifty 500 Value 50 index in a recent video. Pls have a look: ruclips.net/video/aYHRTPTDtNk/видео.html
First i thought am I looking at food video
I genuinely feel overvaluation is an issue in market cap index fund which has created a bubble which will burst.
Thanks for sharing your views
1000
@Shankar: Really well consolidated...I think you are in a consolidation spree 😂...hey I just had a query..do you know any nifty50 inverse ETF available? It would be a good strategy for people wanting to protect the downside without entering the F&O segment...
Hello Anujoy. I don't think there is one .. I tried looking for it. However, there was a tweet (twitter.com/gag_kal/status/1570321491220369408) that says brokers offer it although I haven't enquired on this.
@@shankarnath this page dose not exit message
I think the ) is stuck to the URL that why you couldn't access the page. Pls try this: twitter.com/gag_kal/status/1570321491220369408
@@shankarnath Thanks now can view it...
Is there any Debt Index Fund..??
Yes ! Even I want to know if there is any debt index fund in Indian market.
Why don't you start your paid consulting from me . Why wait two weeks
Sir i had spinal cord injury on june 2021 sir due to thia i m on wheelchair😢 what is the health insurance plan is best for me to meet my future health expenses..I never take any health insurance
Hi, you'll have to talk to a couple of insurers and explain them of your condition. Different insurers have a different take on diseases. You can also approach brokers or aggregators for advice. Try beshak.org .. it's founder, Mahavir knows quite a bit about health insurance. Also keep all your reports (scanned copies) handy as everyone will ask about it. I hope you get better over time, wishing you the best!
@@shankarnath thnku so much for your kind information..:)
Excellent one as usual sir . I am still not confident enough to invest in index fund as it has adani stocks, coal India, Gail ,IOCL etc. And these pull down returns. Also midcap & small cap indices have too many stocks
Most welcome. It's OK to have reservations, not everything needs to be good but as I've said earlier, please watch out for the business & valuations in unison. A good businesses at a great price is comparatively better than a great business at a bad price. Good luck to you!
@@shankarnathdear sir, this is the answer .Other questions in this comment column have responded by you very casually & questions/ queries remains unresponded ?
I'll be damned! Only thought of the nifty 50 and one on the sensex as the lone index funds out there!
You're not alone. I know dozens of investors who have not gone beyond the Nifty 50 or Sensex 30
Can you please let me know which platform allows investor to buy all these fund types ? Thanks for the awesome work again
A single platform might not offer all 11 types. You can use a bunch of platforms to pick certain index fund types like AMC websites, Groww, Fisdom, ET Money, MyCAMS, Bank websites etc. to transact.
Thank you for your kind appreciation
Bro - When FnO follow up video !
Hello. It will take a few weeks, I have to understand this subject first. F&O is new to me.
make a video on life and general insurance companies, their future and impact of income tax on them
Sorry , that because of professional clinical commitments, I attended your last 3 informative lectures - next day.
But for this class, I planned before- " must be First Day First Show. "
Please keep enlighten us ALWAYS
No worries, Dr. Mahanta -- work comes first! Thank you very much for your kind appreciation. I'll be taking a small break myself (no release on coming Wednesday) & will resume regular broadcasting from Saturday
Which index fund is your favorite?
I like quite a few of them .. can't use the word favourite because for different objectives, there are different index funds that work for me. I explained this in a previous video. Link: ruclips.net/video/bN5QdxY3RVs/видео.html
Please go a little slow for better understanding and memory retention.
May I request you watch the video twice. I've always found it to help better with retention and understanding rather than watching something slowly. I know its a personal thing but for me, repetition works better than speed.
Sir, Your explanations are very good....but request you to share deep knowledge.....as now a days every one is advising only....not by genuine heart.... As everyone says....ye stock Lelo..... MFs Sahi hai....LIC me invest karo.....etc...Lekin no body tells dark side of them.... As a innocent investor loss hard earned money....with very less returns....hence please share good genuine advise for betterment of Average family earner....and for safe investment....Thank You....
commodity index fund is missing
Index funds that track different indices, rather than calling them.
types of index funds.
4:31 TCS ranked no 7‼️😅😅
Which is more favoured? Nasdaq 100 index fund or ICICI Prudential US Bluechip fund? @shankarnath
Hi Shankar, did you leave ET money? Because of you i joined and started my MF investment in SIP..
Thanks!
Thank you, Bikash for this kind gratuity. Saw your previous comment aswell .. and I'm happy the content is connecting with you on a utility & presentation level. Thx again for your appreciation and encouragement