Is it worth investing in Nifty 500 index funds like ICICI nifty 500 index considering tracking error? or it’s good to go with actively managed multi-cap funds?
I don’t really see a big advantage in investing in Nifty 500 index fund. Apart from high tracking error, you get minuscule exposure to mid and small cap in Nifty 500.
As such about 83-84% weight in Nifty 500 belongs to Nifty 100 stocks, which is not at all meaningful.
I personally use Nifty and NN50 index funds and active fund for mid and small cap.
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