Investing in index funds can be a great way to diversify and grow your portfolio, especially if you’re new to investing. Index funds are passive investments that aim to track the performance of a particular stock market index or sector. With index funds, you don’t have to worry about researching individual stocks and analyzing company financials, as the fund is already managed by professionals.
In this article, we will provide a list of the best index funds for beginners to invest in 2023.
Let’s take a look at them.
- IDFC Nifty 50 Index
This index fund is designed to track the performance of the Nifty 50 Index, which comprises of 50 leading Indian companies. The fund has an expense ratio of 0.20% and a minimum investment amount of Rs 5,000. This index fund provides investors with exposure to some of India’s largest and most recognizable companies in sectors such as banking, financial services, energy, IT and telecom.
Additionally, it includes stocks from all market capitalizations, making it well-diversified. It is ideal for long-term investments as it offers growth potential over time due to its broad exposure to different sectors and stock sizes.
- HDFC Index S&P BSE Sensex Fund
HDFC Index S&P BSE Sensex Fund is an open-ended exchange-traded fund that tracks the performance of the S&P BSE Sensex, a benchmark index of Indian equities. The fund aims to provide investors with returns that closely correspond to the returns generated by the index, by investing in securities represented in its portfolio in similar proportions as their weightages in the index.
HDFC Index S&P BSE Sensex Fund has no exit load and is suitable for investors looking for long-term capital appreciation. It also offers tax benefits under Section 80C of the Income Tax Act, 1961 up to Rs 1.5 lakh invested annually. The fund carries low risk and charges an annual expense ratio of 0.0005%.
- ICICI Prudential Nifty 50 Index Fund
The ICICI Prudential Nifty 50 Index Fund is a great option for investors in India looking to invest in index funds. The fund invests in the stocks of the Nifty 50 index, which consists of the top 50 companies by market capitalization on the National Stock Exchange. This fund has consistently outperformed its benchmark since its inception in 2008 and has delivered high returns over time.
With low expense ratios and excellent investment performance, this index fund is one of the best options for investors seeking long-term wealth creation through index investing. Besides this, you can also look for crypto trading options.
- SBI Nifty Index Fund
The SBI Nifty Index Fund is an open-ended index fund managed by the State Bank of India. Launched in 1995, it tracks the benchmark NIFTY 50 Index and seeks to provide returns that are commensurate with returns generated by this index. Investments in this fund are made through units which can be bought or sold on a daily basis at the net asset value (NAV) declared on each day.
The minimum initial investment required for investing in this fund is Rs 5000 and subsequent investments can be made with a minimum amount of Rs 1000.
The Bottom Line
When it comes to investing in index funds, there are many options available for Indian investors. It is important to select an index fund that suits your individual financial goals and risk profile. With careful selection and due diligence, investors can use these vehicles to create a diversified portfolio that helps them reach their financial goals.