A Guide To Investing In Sbi Nifty Index Fund

The SBI Nifty Index Fund is a passively managed index fund that invests in all the stocks comprising the Nifty 50 Index in the same proportion as their weightage in the index. The fund has been in existence for over a decade and has delivered average annual returns of around 13-14% since its inception. As of October 2024, the Net Asset Value (NAV) of the fund was between ₹217.17 and ₹229.84. The expense ratio of the fund is approximately 0.5%, and it is considered a very high-risk investment. The minimum investment required is ₹5000, with a minimum SIP investment of ₹500. The fund has no lock-in period, and investors can redeem their investments online through the fund house website or with the help of a mutual fund distributor.

Where to buy SBI Nifty Index Fund units

SBI Nifty Index Fund units can be purchased directly from the SBI Mutual Fund website. Alternatively, units can be bought through platforms such as MF Central and MF Utility. If you are uncomfortable buying mutual funds online, you can seek help from a mutual fund distributor, such as a bank.

ET Money is another platform that allows for investment in the SBI Nifty Index Direct Plan-Growth fund. This can be done by clicking on the "Invest Now" button, entering your details, and confirming.

Investment options and minimum amounts

The SBI Nifty Index Fund is a Large Cap Equity scheme that falls under the category of Equity Mutual Funds. The fund was launched on 17 January 2002 and is managed by Raviprakash Sharma. The fund has an expense ratio of 0.2% and an exit load of 0.20% if redeemed within 15 days. The minimum investment required is Rs. 5000, with a minimum additional investment of Rs. 1000 and a minimum SIP investment of Rs. 500. The fund has no lock-in period, and the suggested investment horizon is >3 years.

The SBI Nifty Index Fund is a passively managed index fund that invests in all the stocks comprising the Nifty 50 Index in the same proportion as their weightage in the index. The fund's portfolio is largely conservative, with most of its holdings in Large Cap stocks and debt instruments. The top holdings of the fund include HDFC Bank Ltd., Reliance Industries Ltd., ICICI Bank Ltd., Infosys Ltd., and ITC Ltd. The fund's asset allocation as of 30 September 2024 was 99.97% in Equity and 0.03% in Cash & Cash Eq.

The Net Asset Value (NAV) of the fund as of 16 October 2024 was Rs. 219.1206. The fund has delivered average annual returns of 13.58% since its inception and has doubled the money invested every 4 years. The fund's returns over different time periods are: 26.79% (1yr), 12.33% (3yr), 17.61% (5yr), and 14.53% (since launch).

Returns and risks

The SBI Nifty Index Fund is a passively managed index fund that invests in all the stocks comprising the Nifty 50 Index in the same proportion as their weightage in the index. The fund's objective is to replicate the performance of the Nifty 50 Index.

In terms of returns, the SBI Nifty Index Fund has delivered 13.77% returns since its inception 21 years ago. The trailing returns over different time periods are: 26.79% (1yr), 12.33% (3yr), 17.61% (5yr) and 14.53% (since launch). The fund's returns are currently better than the category average.

When you invest for five years or more, you can expect gains that beat the inflation rate and fixed-income options. However, it is important to note that there will be ups and downs in your investment value. This fund is suitable for conservative equity investors as it invests in large companies, which tend to fall less when stock prices decline.

Regarding risks, the SBI Nifty Index Fund has a "Very High" risk level as per SEBI's Riskometer. The fund has no lock-in period, but investors are warned not to invest in this or any other large-cap fund if they need to redeem their investment in less than five years. The expense ratio of the fund is 0.48% to 0.50%, and there is an exit load of 0.20% if redeemed within 15 days.

For taxation, short-term capital gains (if units are redeemed within 1 year of investment) are taxed at a rate of 15%. For long-term capital gains (units redeemed after 1 year of investment), gains up to Rs 1 lakh are exempt from tax, while gains over Rs 1 lakh are taxed at a rate of 10%. Dividend income is added to the investor's income and taxed according to their respective tax slabs. If an investor's dividend income exceeds Rs. 5,000 in a financial year, the fund house deducts a TDS of 10% before distributing the dividend.

Taxation

The taxation of the SBI Nifty Index Fund depends on whether the units are sold within or after 1 year from the date of investment. If the units are sold within 1 year, the entire amount of gain is taxed at a rate of 15%. If the units are sold after 1 year, gains up to Rs 1 lakh in a financial year are exempt from tax, while gains over Rs 1 lakh are taxed at a rate of 10%. Short-term capital gains (STCG) are taxed at 20% if the investment is redeemed before 1 year, and long-term capital gains (LTCG) are taxed at 12.5% on returns of ₹1.25 lakh or more in a financial year.

Dividends are added to the income of the investors and taxed according to their respective tax slabs. If an investor's dividend income exceeds Rs. 5,000 in a financial year, the fund house also deducts a TDS (Tax Deducted at Source) of 10% before distributing the dividend.

Fund performance and portfolio

The SBI Nifty Index Fund is a passively managed index fund that invests in all the stocks comprising the Nifty 50 Index in the same proportion as their weightage in the index. The fund's holdings are mostly in large-cap stocks and debt instruments, indicating a conservative investment strategy. The fund has delivered 13.77% returns since its inception 21 years ago. As of 30 September 2023, the fund had invested 99.97% in equity and 0.03% in cash and cash equivalents.

The fund's portfolio is considered conservative, with 79.87% of its equity investments in large-cap stocks, 5.13% in mid-cap stocks, and the remaining 14.88% in other investments. The top holdings in the portfolio include well-known companies such as Reliance Industries Ltd., Tata Consultancy Services Ltd., and Larsen & Toubro Ltd.

The fund's performance has been better than the category average, with a very high-risk rating. It has an expense ratio of 0.50 and no lock-in period. The latest NAV (as of 16 October 2024) is ₹219.1206, with an AUM of ₹8729.37 Cr.

Frequently asked questions