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A report released on index funds by Cafemutual shows that at least 11 out of 94 index funds have tracking error less than or equal to 0.05%.
Tracking error is the annualized difference between standard deviation of the fund and its benchmark. Lower the tracking difference, better the fund. It’s calculated in percentage.
Navi Nifty 50 Index Fund has the lowest tracking error of 0.01% among large cap index funds.
In midcap space, Navi Nifty Midcap 150 Index Fund has the lowest tracking error of 0.02% followed by UTI Nifty Midcap 150 Quality 50 Index Fund with tracking error 0.05% and ICICI Prudential Nifty Midcap 150 Index Fund with tracking error of 0.09%.
Similarly, Nippon India Nifty Smallcap 250 Index Fund has a tracking error of 0.09% making it the lowest in small cap index fund category. ICICI Prudential Nifty
Smallcap 250 Index Fund with 0.14% and Motilal Oswal Nifty Smallcap 250 Index Fund with 0.15% were next in the list.
While Nippon India Nifty 50 Value 20 Index Fund has the lowest tracking error in factor fund category, Navi Nifty Bank Index Fund led in sectoral/thematic index fund category.
In target maturity fund, Aditya Birla Sun Life CRISIL IBX AAA - Jun 2023 Index Fund has the lowest tracking error.
Let us look at the table to know which are the top index funds in terms of tracking error
Large cap
|
|
Scheme Name |
Tracking Error - Regular (%) |
|
1 |
Navi Nifty 50 Index Fund |
0.01 |
|
2 |
Navi Nifty Next 50 Index Fund |
0.02 |
|
SBI Nifty Index Fund |
0.02 |
|
|
HDFC Index S&P BSE Sensex Fund |
0.02 |
|
|
UTI Nifty 50 Index Fund |
0.02 |
|
|
3 |
HDFC Index Fund Nifty 50 Plan |
0.03 |
|
ICICI Prudential Nifty 50 Index Fund |
0.03 |
Midcap
|
|
Scheme Name |
Tracking Error - Regular (%) |
|
1 |
Navi Nifty Midcap 150 Index Fund |
0.02 |
|
2 |
UTI Nifty Midcap 150 Quality 50 Index Fund |
0.05 |
|
3 |
ICICI Prudential Nifty Midcap 150 Index Fund |
0.09 |
Small cap
|
|
Scheme Name |
Tracking Error - Regular (%) |
|
1 |
Nippon India Nifty Smallcap 250 Index Fund |
0.09 |
|
2 |
ICICI Prudential Nifty Smallcap 250 Index Fund |
0.14 |
|
3 |
Motilal Oswal Nifty Smallcap 250 Index Fund |
0.15 |
Factor fund
|
|
Scheme Name |
Tracking Error - Regular (%) |
|
1 |
Nippon India Nifty 50 Value 20 Index Fund |
0.07 |
|
2 |
UTI S&P BSE Low Volatility Index Fund |
0.08 |
|
3 |
UTI Nifty200 Momentum 30 Index Fund |
0.14 |
Sectoral/ Thematic fund
|
|
Scheme Name |
Tracking Error - Regular (%) |
|
1 |
Navi Nifty Bank Index Fund |
0.01 |
|
2 |
Motilal Oswal Nifty Bank Index Fund |
0.10 |
|
3 |
ICICI Prudential Nifty Bank Index Fund |
0.16 |
Target maturity
|
|
Scheme Name |
Tracking Error - Regular (%) |
|
1 |
Aditya Birla Sun Life CRISIL IBX AAA - Jun 2023 Index Fund |
0.12 |
|
2 |
Bandhan CRISIL IBX Gilt June 2027 Index Fund |
0.20 |
|
3 |
Axis CRISIL IBX 70:30 CPSE Plus SDL April 2025 Index Fund |
0.37 |
|
Aditya Birla Sun Life CRISIL IBX 60:40 SDL+AAA PSU-Apr 2025 Index Fund |
0.37 |
International
|
|
Scheme Name |
Tracking Error - Regular (%) |
|
1 |
Motilal Oswal S&P 500 Index Fund |
0.15 |
|
2 |
ICICI Prudential NASDAQ 100 Index Fund |
0.44 |
|
3 |
Edelweiss MSCI India Domestic & World Healthcare 45 Index Fund |
1.35 |
Tracking Difference
Cafemutual also captured the tracking difference of at least 94 funds.
Tracking difference is simply the difference between returns generated by the fund and its benchmark. Lower the tracking difference, better the fund. It’s calculated in percentage.
With tracking difference of -0.19, -0.21 and -0.37, Bandhan Nifty 50 Index Fund, Bandhan Nifty 100 Index Fund and UTI Nifty 50 Index Fund were the top funds in large cap index fund category.
In mid cap space, ICICI Prudential Nifty Midcap 150 Index Fund, UTI Nifty Midcap 150 Quality 50 Index Fund and Nippon India Nifty Midcap 150 Index Fund have lowest tracking difference of -0.47, -0.66 and -1.12 respectively.
While ICICI Prudential Nifty Smallcap 250 Index Fund has the lowest tracking difference in small cap fund category, UTI Nifty200 Momentum 30 Index Fund led the factor fund category.
Let us look at the table to know more.
Large cap
|
|
Scheme Name |
Tracking Difference (1 year) - Regular (%) |
|
1 |
Bandhan Nifty 50 Index Fund |
-0.19 |
|
2 |
Bandhan Nifty 100 Index Fund |
-0.21 |
|
3 |
UTI Nifty 50 Index Fund |
-0.37 |
Midcap
|
|
Scheme Name |
Tracking Difference (1 year) - Regular (%) |
|
1 |
ICICI Prudential Nifty Midcap 150 Index Fund |
-0.47 |
|
2 |
UTI Nifty Midcap 150 Quality 50 Index Fund |
-0.66 |
|
3 |
Nippon India Nifty Midcap 150 Index Fund |
-1.12 |
Small cap
|
|
Scheme Name |
Tracking Difference (1 year) - Regular (%) |
|
1 |
ICICI Prudential Nifty Smallcap 250 Index Fund |
-1.23 |
|
2 |
Aditya Birla Sun Life Nifty Smallcap 50 Index Fund |
-1.31 |
|
3 |
Nippon India Nifty Smallcap 250 Index Fund |
-1.48 |
Factor fund
|
|
Scheme Name |
Tracking Difference (1 year) - Regular (%) |
|
1 |
UTI Nifty200 Momentum 30 Index Fund |
-0.78 |
|
2 |
Edelweiss Nifty 100 Quality 30 Index Fund |
-1.10 |
|
3 |
Nippon India Nifty 50 Value 20 Index Fund |
-1.14 |
Sectoral/Thermal
|
|
Scheme Name |
Tracking Difference (1 year) - Regular (%) |
|
1 |
Motilal Oswal Nifty Bank Index Fund |
-1.15 |
|
2 |
Navi Nifty Bank Index Fund |
-1.33 |
|
3 |
ICICI Prudential Nifty Bank Index Fund |
-1.56 |
Target maturity
|
|
Scheme Name |
Tracking Difference (1 year) - Regular (%) |
|
1 |
Edelweiss CRISIL PSU Plus SDL 50:50 Oct 2025 Index Fund |
-0.11 |
|
2 |
Edelweiss NIFTY PSU Bond Plus SDL Apr 2027 50:50 Index |
-0.23 |
|
3 |
Aditya Birla Sun Life CRISIL IBX 60:40 SDL+AAA PSU-Apr 2027 Index Fund |
-0.24 |
International fund
|
|
Scheme Name |
Tracking Difference (1 year) - Regular (%) |
|
1 |
ICICI Prudential NASDAQ 100 Index Fund |
-0.02 |
|
2 |
Edelweiss MSCI India Domestic & World Healthcare 45 Index Fund |
-1.17 |
|
3 |
Motilal Oswal S&P 500 Index Fund |
-1.57 |
