HDFC Asset Management, investment manager to HDFC Mutual Fund (HDFC MF), one of India’s leading mutual fund houses with Rs. 4.13 lakh crore in Assets Under Management as on June 30, 2022, announces the 20th anniversary of its index funds tracking the NIFTY 50 and S&P BSE SENSEX Index. Both funds were launched on July 17, 2002.
HDFC AMC Ltd. has been a pioneer in the space as it was the one of the first AMCs to launch index funds in India. This is testament to the vision of HDFC AMC’s leadership, who understood the benefits of Index Solutions and created an innovative product for Indian investors.
Index funds form an integral part of HDFC MF’s suite of Index Solutions, also known as passive funds. The tracking error of 0.05% for the HDFC Index Fund – NIFTY 50 Plan and 0.04% for the HDFC Index Fund – S&P BSE SENSEX Plan, is among the lowest in the industry.
Since Inception Returns
HDFC Index Fund – NIFTY 50 Plan: 14.20 per cent
HDFC Index Fund – S&P BSE SENSEX Plan: 14.48 per cent
(Data is as of June 30, 2022)
Navneet Munot, Managing Director and Chief Executive Officer, HDFC Asset Management Co. Ltd. said, “Index funds are a suitable way for investors to participate in the India growth story. Our 20 years+ experience in this space gives us a definite edge. This category is growing and there is tremendous opportunity going forward. We are expanding our range of Index Solutions to include several additional popular indices. This way, we hope to continue fulfilling our mission to be the wealth creator for every Indian.”
Index funds are a type of mutual fund which track an underlying index. These funds are easily accessible by investors since they do not need a demat account to invest in such funds.
Index funds offer several benefits to investors. They can get access to a well-diversified portfolio of companies from popular indices like the NIFTY 50 and S&P BSE SENSEX through a single product.
The majority of index funds’ assets under management (AUM) track market-capitalization based indices like the NIFTY 50.
Most investors are already familiar with these widely followed indices and hence it is easy for them to understand index funds. Index funds represent a simple investment proposition with the return outcome dependent on the performance of their underlying benchmarks.
Total AUM of equity index funds stood at Rs. 40,396.1 crores at the end of June 2022, up nearly 7.1x in 3 years, relative to the AUM of Rs. 5,705.4 crores at the end of June 2019 (source – publicly available information, internal calculations).