Fund Of Fortnight

Every fortnight, we recommend one open-ended equity diversified fund that has the best potential of returns for the next one year considering its constituents remain the same.[EasyDNNnews:PaidContentStart]

Reason for recommendation
With global trade tensions, tariff uncertainties, and earnings-related volatility, Large-Cap index funds offer stability and resilience. Backed by India’s strongest companies with steady earnings, these funds provide diversified exposure and lower risk amid unpredictable markets. While small- and Mid-Caps may struggle, large caps benefit from strong balance sheets, institutional support, and mature operations. Add to that their low cost, passive nature, and historical ability to weather global shocks, and large-cap index funds become a smart, stress-free choice for long-term wealth creation in today’s uncertain environment.

To gain exposure to the Nifty 50 universe, you can consider a Nifty 50-based index fund like Nippon India Index Fund Nifty 50 Direct Growth. When selecting an index fund, the main parameter to evaluate is the underlying index—in this case, the Nifty 50. The beauty of index investing lies in its simplicity, cost-effectiveness, and ability to deliver market-matching returns. Two key metrics to watch are the tracking error and expense ratio. Tracking error measures how closely the fund follows the index, while tracking difference reflects the return gap between the fund and the benchmark—both ideally should be low. A lower expense ratio helps enhance net returns. Nippon India Index Fund Nifty 50 Direct Growth performs well on these parameters, making it a strong candidate among its peers. The tracking error of the fund is only 0.27 per cent, which means it is tracking returns of the Nifty 50 with a difference of just 0.27 per cent. Also, the expense ratio of the fund is a mere 0.07 per cent, which is much below its peers whose expense ratio ranges from 0.19 per cent to 0.4 per cent.

Overall, large-cap index funds are a smart choice for investors seeking a low-cost, diversified, and tax-efficient way to participate in the equity markets—even when valuations seem elevated. Hence, the fund is suited to moderate risk-taking investors with an investment horizon of more than one year.

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