The newly launched Navi Nifty 50 Index Fund is the new offering by one of the latest entrant in the mutual fund industry 'Navi Mutual Fund'. Before getting to know the details of the fund and its lucrativeness, let's first know about the fund-whose credibility is highly important for any investor.
About Navi Mutual Fund
This AMC company is owned by Flipkart co-founder Sachin Bansal and the company is registered with the SEBI and the Sponsor is Anmol Como Broking Private Limited. Navi AMC Limited is the Investment Manager to Navi Mutual Fund. Navi Trustee Limited is the trustee to Navi AMC Limited.
Apart from the AMC arm, the company is into offering financing facilities such as personal loan, housing loan, 2-wheeler loan, SME Business loan as well as general insurance services.
Features of Navi Nifty 50 Index Fund
Investment in the fund is currently open
It is an open ended Index fund with large cap equity orientation
Entry and exit load are 0%
Fund Manager- Mr. Girish Raj
Minimum investment- Rs. 500 via SIP as well as through lump sum payment
Benchmark- Nifty 50 TRI
Investment objective: The fund will typically replicate Nifty 50 returns and as the exposure is typically in large caps, the fall shall not be drastic in case when the markets dives. Hence suitable for more conservative investors who do not like high risk exposure.
Direct plan of Navi Index fund-0.06% shall be the cheapest within the categpry. Within direct plans of the index fund,, the cheapest funds carry a minimum expense ratio of between 0.1-0.15%
Index funds as an investment are the safest?
Typically index funds being passively managed and providing and working to offer return closest to the benchmark index are highly safe. Furthermore, these provide exposure to a set of stocks comprising the benchmark index and so in the case of Navi Index fund the portfolio shall be Nifty stocks. Another positive with this Index fund is that they can be bought directly from the AMC's site and one need not have a demat account.
Past Nifty returns
The Nifty index has offer a five-year CAGR of 15.7% and a 10-year CAGR of 12.5% (as of 25 June). Further on a year to date basis, the returns have been over 13% while in the last one year it has been to the tune of over 48%.
Why Navi Nifty 50 Index Fund?
Ace Investors' like Warren Buffet even promote the idea of investing in index funds for naïve investors or first time investors for whom stock picking is highly difficult. Further he goes onto say many of the average investor cannot do stock picking. Also, note this fund is likely to yield you good enough returns if you remain invested for long. Not to forget, this is not the first offering by the AMC and there are other 2 funds also to its credit namely Navi Long Term Advantage Fund and Navi 3 in 1 fund.
Also, because of the lowest cost structure within the category, the investors' return shall increase in the same proportion.
Note while past performance is integral in the selection of any fund for that matter, here for the index funds barring the tracking error, the fund typically would more or less replicate Index returns which herein is the Nifty index.
Note herein the views expressed are just for information and investors need to do their own research before considering the investment option detailed out here. Author, neither the company nor the AMC shall not be responsible for any decision taken based on the above report.