Low AUM in Index funds of Edelweiss AMC

Personal finance
1

I’ve observed that Edelweiss AMC’s Passive funds has very low AUM while other category is getting huge AUM MoM while few index funds are present since past more than 3 years but still not able to cross 100 cr. while they have very low expense ratio in Index funds. Any specific reason why they are not able to grow Index Fund’s AUM? while other AMC launched fund at the same time with Edelweiss they are growing at very good rate.

Is it worth to consider Edelweiss AMC for Index funds or go with other AMC? Any suggestions?

2

Any specific reason they should have high AUM? I mean something didn’t work, so it didn’t work. There is no reason for everything.
Index funds are commodity business, and beyond a point there is no differentiator between AMCs

It is clear public is not considering it. Any specific reason you are interested in it?
Whole point of index fund is that it is passive investing. Don’t try to make it active investing by researching each and every index fund available in market.

As a rule of thumb, go with established name in index funds. That’s where most AUM will be and over long run, they will be most reliable.

2 Likes
3

If I were you I will do two things. Check the AUM and the pedegree of the fund house. Understanding the pedegree can be a daunting task. Since you are interested in index fund go for well known names like sbi uti etc and check their Aum and expense ratio and go for the cheapest

When u have so many choices dont go to a amc which is the cheapest. Since general public go for well known names the index funds from the fund house you have pointed out might not get many investors.

This is my personal opinion.

1 Like
4

Thanks for sharing your thoughts. I was considering it because of lowest expense ratio and tracking error. while other known AMC has much higher expense ration compare to Edelweiss. that’s the only reason.

5

Lowest expense ratio should never be criteria for selecting a fund, because it is a marketing gimmick. Funds typically advertise a very low unsustainable expense ratio to attract AUM, and once sufficient AUM is achieved, invariably expense ratio is increased.

So fund you choose should have low expense ratio, but never aim for lowest. Fund with lowest expense ratio will keep changing every 6 month or so.

1 Like