Ask me anything about passive investing and index funds

AMA (Ask Me Anything)
22

We are introducing 4 index funds -

  1. Nifty500 - top 500 stocks in India.
  2. Nifty Bank - Sectoral Banking fund (top 12 banks in India)
  3. Nifty SmallCap 250 - Top 250 small-cap stocks
  4. NiftyMid-Cap 150 - Entire mid-cap index.

Expense Ratio will be 0.35% direct/1% Regular. Exit load 1% (upto first 3 months only)
Let me know if this is okay

1 Like
23

Hey Divyajeet - I agree expense ratio and tracking error varies across all funds. From my experience total tracking error = expense ratio over the medium to long term. So in our case - 35bps fee will translate to a tracking error of 0.35% per year.

24

some other index fund on nifty has exit loads for 3-7 days, but for motilal fund, why it kept as 3month? any specific reason!

25

with RE: exit load - two reasons why:

  1. We see these products as medium to long-term investing instruments.
  2. Trading costs when investors enter and exit MFs are shared by the pool (not the individual) which could increase costs and tracking error (not great for long-term investors).
1 Like
26

With that we’ll end the AMA. Thank you @pratikoswal for taking the time and answering all the queries. We’d love it if we can another AMA sometime down the line.