Now days niyo recommended only new index fund without any past track record ? Any reason behind it?

Now days niyo recommended only new index fund without any past track record ? Any reason behind it?

Why only index fund ?? Not active fund …

Hi Nilesh

The reason why we have recommended Index funds this year is because active mutual funds are under-performing their benchmarks, especially when you consider longer time horizons.

For instance, over 80% of the Large Cap Mutual Funds have under-performed as compared to a simple Sensex or Nifty index over a 5 year horizon.

This means that it’s better to invest in a fund that just tracks the Sensex or Nifty index than in an active Mutual Fund.

This is exactly what Index Mutual Funds do and because of this they are low cost.

Index Funds are not only lowest cost in terms of expense ratio, they also have the lowest exit loads. For instance, while most active equity mutual funds charge an exit load of 1% for 1 year, most index funds either don’t have any exit loads or become exit load free within a month.

Here is also a blog that has the list of our latest recommendation and also our reasoning behind selecting these: The 2022 list of recommended Mutual Funds on Niyo Money

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