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Research done by Cafemutual on index funds shows that nine large cap index funds have tracking error of less than 0.6.
Tracking error is the annualized difference between standard deviation of the fund and its benchmark.
SBI Nifty Index Fund and UTI Nifty 50 Index Fund have the lowest tracking error of 0.3 among large cap index funds.
In mid cap space, Aditya Birla Sun Life Nifty Midcap 150 Index Fund and Nippon India Nifty Midcap 150 Index Fund have the lowest tracking error of 0.14.
Aditya Birla Sun Life Nifty Smallcap 50 Index Fund has a tracking error of 0.16, which is the lowest in the small cap category. ICICI Prudential Nifty Smallcap 250 Index Fund, Motilal Oswal Nifty Smallcap 250 Index Fund, and Nippon India Nifty Smallcap 250 Index Fund, were next in the list with the tracking error of 0.17 and 0.22, respectively.
A lower tracking error signifies better performance.
Here are the top 3 funds across all categories with the lowest tracking error.
Large Cap: Top 3 of total 35 schemes reported
|
Rankings |
Scheme Name |
Tracking |
|
1 (2 schemes) |
SBI Nifty Index Fund |
0.3 |
|
UTI Nifty 50 Index Fund |
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|
2 (4 schemes) |
HDFC Index Fund Nifty 50 Plan |
0.4 |
|
HDFC Index S&P BSE Sensex Fund |
||
|
Navi Nifty 50 Index Fund |
||
|
Nippon India Index Nifty 50 |
||
|
3 (3 schemes) |
DSP Nifty 50 Equal Weight Index Fund |
0.6 |
|
DSP Nifty 50 Index Fund |
||
|
Motilal Oswal Nifty 50 Index Fund |
Mid cap: Top 2 of total 3 schemes reported
|
Rankings |
Scheme Name |
Tracking |
|
1 (2 schemes) |
Aditya Birla Sun Life Nifty Midcap 150 Index Fund |
0.14 |
|
Nippon India Nifty Midcap 150 Index Fund |
||
|
2 |
Motilal Oswal Nifty Midcap 150 Index Fund |
0.19 |
Small Cap: Top 3 of total 4 schemes reported
|
Rankings |
Scheme Name |
Tracking |
|
1 |
Aditya Birla Sun Life Nifty Smallcap 50 Index Fund |
0.16 |
|
2 (2 schemes) |
ICICI Prudential Nifty Smallcap 250 Index Fund |
0.17 |
|
Motilal Oswal Nifty Smallcap 250 Index Fund |
||
|
3 |
Nippon India Nifty Smallcap 250 Index Fund |
0.22 |
Debt: Top 2 of total 8 schemes reported
|
Rankings |
Scheme Name |
Tracking |
|
1 |
LIC MF S&P BSE Sensex Index Fund |
0.16 |
|
2 |
IDBI Nifty Junior Index |
0.28 |
Factor: Top 3 of total 3 schemes reported
|
Rankings |
Scheme Name |
Tracking |
|
1 |
Nippon India Nifty 50 Value 20 Index Fund |
0.12 |
|
2 |
UTI Nifty200 Momentum 30 Index Fund |
0.16 |
|
3 |
Edelweiss Nifty 100 Quality 30 Index Fund |
0.32 |
Tracking difference is another interesting aspect that the research has captured.
With the tracking difference of -0.16, -0.17 and -0.18, Tata Nifty 50 Index Fund, LIC MF Nifty 50 Index Fund and Kotak Nifty 50 Index Fund are the top 3 index funds with lowest tracking difference in large cap space.
Tracking difference is simply the difference between returns generated by the fund and its benchmark.
In mid cap space, Aditya Birla Sun Life Nifty Midcap 150 Index Fund, Motilal Oswal Nifty Midcap 150 Index Fund and Nippon India Nifty Midcap 150 Index Fund have the lowest tracking difference of -0.34, -0.36, and -0.59.
UTI Nifty200 Momentum 30 Index Fund, Edelweiss Nifty 100 Quality 30 Index Fund and Nippon India Nifty 50 Value 20 Index Fund appeared on the top with the lowest tracking difference of -0.25, -0.45, and -0.48 among all factor-based index funds.
Here are the top 3 funds across all categories with the lowest tracking difference.
Large Cap: Top 3 of total 35 schemes reported
|
Rankings |
Scheme Name |
Tracking |
|
1 |
Tata Nifty 50 Index Fund |
-0.16 |
|
2 |
LIC MF Nifty 50 Index Fund |
-0.17 |
|
3 |
Kotak Nifty 50 Index Fund |
-0.18 |
Mid cap: Top 3 of total 3 schemes reported
|
Rankings |
Scheme Name |
Tracking |
|
1 |
Aditya Birla Sun Life Nifty Midcap 150 Index Fund |
-0.34 |
|
2 |
Motilal Oswal Nifty Midcap 150 Index Fund |
-0.36 |
|
3 |
Nippon India Nifty Midcap 150 Index Fund |
-0.59 |
Small Cap: Top 3 of total 4 schemes reported
|
Rankings |
Scheme Name |
Tracking |
|
1 |
Aditya Birla Sun Life Nifty Smallcap 50 Index Fund |
-0.33 |
|
2 |
Aditya Birla Sun Life Nifty Smallcap 50 Index Fund |
-0.90 |
|
3 |
Nippon India Nifty Smallcap 250 Index Fund |
-0.95 |
Factor: Top 3 of total 3 schemes reported
|
Rankings |
Scheme Name |
Tracking |
|
1 |
UTI Nifty200 Momentum 30 Index Fund |
-0.25 |
|
2 |
Edelweiss Nifty 100 Quality 30 Index Fund |
-0.45 |
|
3 |
Nippon India Nifty 50 Value 20 Index Fund |
-0.48 |
Debt: Top 3 of total 8 schemes reported
|
Rankings |
Scheme Name |
Tracking |
|
1 |
IDBI Nifty Junior Index |
-0.05 |
|
2 |
LIC MF S&P BSE Sensex Index Fund |
-0.43 |
