SBI Mutual Fund Top Index Funds:SBI Mutual Fund, one of the largest fund houses in the country, has launched three new passive funds i.e. index funds and ETFs so far in 2024. In fact, mutual fund schemes falling under the category of passive funds have become increasingly popular among investors. This is the reason why mutual fund companies have launched passive funds on a large scale so far this year. According to a report, out of about 170 New Fund Offers (NFOs) launched in 2024, about 78 are index funds and ETFs falling under the category of passive funds. The major reason for this popularity of passive funds is their ability to give returns according to market performance at low cost. For example, the top 7 index funds and ETFs of SBI Mutual Fund have also given excellent returns of 40% to 62% in the last one year. We will learn about these funds later, but first let us understand what passive funds mean.
What is the meaning of passive funds
Passive funds are those mutual fund schemes that track Nifty 50, Sensex or any other similar benchmark index. The objective of these funds is to give returns equal to the performance of that benchmark index. The fund manager does not actively decide which stock or asset to invest in or sell through passive funds. Rather, these funds invest in the stocks of companies included in the benchmark index in the same proportion as in the index. That is why they are called passive funds. Both index funds and ETFs fall under the category of passive funds.
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Performance of Top 7 Passive Funds of SBI Mutual Fund
SBI Mutual Fund’s top 7 passive funds and ETFs have delivered excellent returns tracking their respective benchmarks in the last one year. Take a look at the returns of these funds:
1. SBI Nifty Next 50 ETF
– 1 Year Return: 62.28%
– Benchmark: NIFTY Next 50 Total Return Index
2. SBI Nifty Next 50 Index Fund (Direct Plan)
– 1 Year Return: 61.92%
– Benchmark: NIFTY Next 50 Total Return Index
3. SBI BSE Sensex Next 50 ETF
– 1 Year Return: 50.12%
– Benchmark: BSE Sensex Next 50 Total Return Index
4. SBI Nifty Smallcap 250 Index Fund (Direct Plan)
– 1 Year Return: 48.03%
– Benchmark: NIFTY Smallcap 250 Total Return Index
5. SBI Nifty Consumption ETF
– 1 Year Return: 45.19%
– Benchmark: NIFTY India Consumption Total Return Index
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6. SBI Nifty Midcap 150 Index Fund (Direct Plan)
– 1 Year Return: 42.25%
– Benchmark: NIFTY Midcap 150 Total Return Index
7. SBI Nifty 200 Quality 30 ETF
– 1 Year Return: 40.42%
– Benchmark: NIFTY 200 Quality 30 Total Return Index
(Source: AMFI)
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Why invest in passive fundsInvestment,
1. Low cost:The biggest advantage of passive funds is their low expenses. Since the objective of these funds is only to track the benchmark index, their expense ratio is quite low.
2. Market-wise returns: Passive funds provide returns linked to market performance, thereby allowing investors to reap the full benefit of market performance.
3. Low risk: Due to following the index, the investment of passive funds is divided among many companies. This reduces the risk. However, the risk may be higher in funds that follow the index related to a particular theme or sector.
4. Track record:Before investing in most index funds and ETFs, you can get some idea of their potential performance by looking at the track record of their benchmark index.
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What precautions should be taken while investing in passive funds?
A big advantage of investing in passive funds is their low expense ratio and better returns. But before investing in any new fund, investors should keep in mind its benchmark, track record and their investment goals. You can also get information about the important things that any smart investor should consider while selecting an index fund for investment by clicking here.
(Disclaimer: The purpose of this article is only to provide information, not to recommend investment in any scheme. Past returns of equity mutual funds cannot be considered as a guarantee of similar performance in future. Take any investment decision only after getting complete information and taking advice from your investment advisor.)
