UTI Nifty Index Fund

UTI Nifty Index Fund is a passively managed fund that attempts to deliver similar returns as its benchmark. This fund is managed by Kaushik Basu. Like majority of the index funds in the country this one’s performance has not been very encouraging. You may continue holding this fund if you hold units in it.

Where does UTI Nifty Index fund invest your money?

UTI Nifty Index Fund is an index fund which means most of your money will be invested in S&P CNX Nifty stocks in a proportion that is as close as possible to the weightages of these stocks in the Nifty index. UTI Nifty Index Fund has 98% allocation to stocks of large companies and 2% allocation to those of mid size companies.

Suitable for what?
  • Child's education
  • Child's marriage
  • Planning for retirement
  • Lifestyle needs
Not suitable for what?
  • Creating wealth
  • Short term needs
How much to invest?

Minimum one time investment is Rs 5000 and minimum SIP is Rs 500 per month. You can make UTI Nifty Index Fund as part of your core portfolio. Core portfolio is investments that are made for your basic goals and makes up about 70% of your investment portfolio. Do not do the mistake of investing in too many mutual fund schemes. At any point of time do not have more than two mutual fund schemes in your core portfolio. 

Our recommendation for fresh investment
Not Recommended
Our recommendation for existing investment.
How has UTI Nifty Index Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched at March 2000, your value of investments would be around Rs 3.7 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 1.13lakhs. The performance has been better or similar to other large cap mutual funds. The fund has been giving at around 2.5% every year for those who stayed invested for last 5 years.

Assume you had invested Rs 10,000 every month in UTI Nifty Index Fund through SIP for the past 5 years today you would have around Rs 7.55 lakhs.

How will UTI Nifty Index Fund perform in the future?

Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 9% then the leading companies tend to do well. When the companies do well their stock prices follows their performance. So if you expect the economy to grow at 8% then you can expect top performing mutual funds to give you returns in excess of 14%.

We advise you to avoid too much of star gazing and future prediction. Be reminded that equities are one of the asset classes that have the potential to beat inflation. Your aim for core portfolio should be to beat inflation.

When to review the performance?

Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a year. Too much attention is not good.

What charges apply?

A onetime fee of Rs 100 is charged on investments over Rs 10, 000 made through distributors. If you are a first time investor in mutual funds an additional Rs 50 is charged to cover KYC expenses. This is deducted from your investment and can be skipped if you buy directly from the mutual fund via their website or offices.

If units are sold within 15 days an exit load of 1% is deducted from your total returns. No exit load applies for units withdrawn thereafter. Expense ratio of UTI Nifty Index Fund is 1.50%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.

When to exit?

Withdraw when your goals are close to achievement. Do not remove the money when the markets go up or down. Do not panic. Stick to your goals.

What are the tax implications?

The returns in an equity mutual fund are absolutely tax free, provided you do not withdraw within 1 year. UTI Nifty Index Funddoes not qualify for sec 80C ELSS benefits.

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