Index Funds Discussions

[marcus]

Index funds will possibly equal returns from the best equity diversified funds only in a time period with a major correction, like the one we witnessed in May-June. If there is no correction then owing to active portfolio management a diversified equity fund will far outperform any index fund.

True index funds do have a lowere load and recurring charges than diversified equity funds but despite this the returns from diversified equity funds are not only greater but far greater than index funds in INDIA, however in USA I believe 75% of the diversified equity funds including those which practice closet indexing underperform the benchmark in index, so the experts suggest its better to go with index funds for the long term. However this is not the case in India.

Moreover in India the tracking error is quite high for index funds and most of them cant even replicate the returns of the index.

In India there is nothing to best diversified equity funds especially for the long term.

I wouldn't put more than 10% of my money allocated to MF's in index funds, the rest would go to diversified equity and balanced funds in a ratio determined by my risk exposure.

[ivanboesky]

Sarathc,
There are official designated market makers who provide liquidity to those entering/ exiting the market. It is not only dependent on the traders.
Also, if you want to trade in very large quantities (esp. for institutions), you can go to the fund house who buy the underlying and create units for you.
Check out http://nseindia.com/content/products/prod_etfs.htm

[vince]

While we are discussing index funds, whatever happened to the Inverse index funds. Does any fund house offer them ?

Any info available on these ?

[ivanboesky]

As far as I know Benchmark AMC had filed an offer document with SEBI for an Inverse Index Fund. Knowing the way things work with the regulator though, guess the offer document hasnt been cleared yet.

[vince]

Thanks for the feedback Ivan. I don't know why the mindless bias against the short side, or is it some other forces at work. The big boy's never want the small timer to edge in , specially on the short side.

[vince]

Now that SEBI has allowed institutional short selling, do we see an inverse fund on the horizon ? Benchmark...???

[rameshk74]

Hi,

How do I purchase the units of ICICI SPIcE fund. This is an exchange traded index fund. I already have demat and trading account with ICICI direct. But they do not provide the option for purchasing ICICI Spice fund. The reason told was that this fund is not traded in BSE and NSE exchanges.

Surprisingly even ICICI mutual fund customer support team could not help me. They simply asked me to contact some other broker to purchase the units. Any help is appreciated

Ramesh Krishnamoorthy

[vince]

Hello,

Log into icicidirect, go to equities, punch in the icicicode SPICE and buy/ sell.

Don't you feel we are better than the support team you interacted with and much faster.

[satya_pinku2003]

Originally Posted by ivanboesky

Thanks for the post TATrader, but dont you think its better to invest in an Index ETF as compared to an Index Fund. The costs of buying an ETF are lower, and you dont have to enter or exit at the end of day NAV. You can buy intra-day and sell intra-day, so its provides a clear advantage over a index fund.
Any other opinions?

Hi
i want to trade in Index ETFs.......
still now i know three ETFs ,, Nifty BeEs,SPICE and benchmark mutual funds nifty junior

can i trade these ETFs from any broker Ac. or SPICE can be traded only from ICICI Ac..

i have seen SPICE traded with huge sprade ....... and ZERO Vol.
you have said market maker wil provide lequidity ...... then if i want to buy 100 shares then at which price it wil be executed....

please giude if you are trading in ETFs


Regards
Satya

[satya_pinku2003]

Originally Posted by vince

While we are discussing index funds, whatever happened to the Inverse index funds. Does any fund house offer them ?

Any info available on these ?

Hi
what does inverse fund mean ?? is it like we can short NAV also ??

Satya