The LIC MF Nifty 50 ETF is an exchange-traded fund that aims to replicate the performance of the Nifty 50 Index by investing in the same securities that constitute the index. This provides investors with exposure to India’s top 50 blue-chip companies.
Key Details:
- Investment Objective: To generate returns that closely correspond to the total returns of the Nifty 50 Index, subject to tracking errors.
- Fund Manager: Mr. Sumit Bhatnagar.
- Expense Ratio: 0.06%.
- Assets Under Management (AUM): ₹851 Crores as of July 31, 2024.
- Net Asset Value (NAV): ₹265.2018 as of August 15, 2024.
Investment Suitability:
This ETF is suitable for investors seeking long-term capital appreciation by passively investing in a diversified portfolio of well-known companies represented by the Nifty 50 Index. It’s ideal for those with an investment horizon of more than three years and a high-risk tolerance.
How to Invest:
Investors can purchase units of the LIC MF Nifty 50 ETF through the LIC Mutual Fund website or via stock exchanges like NSE and BSE, using a demat account. It’s also available on various online trading platforms.
Performance Overview:
Over the past five years, the Nifty 50 Index has delivered significant returns, reflecting the growth of India’s leading companies. Investing in this ETF provides exposure to this growth, though past performance is not indicative of future results.
Considerations:
- Market Volatility: As an equity-based ETF, its value can fluctuate based on market conditions.
- Tracking Error: The fund’s returns may slightly differ from the Nifty 50 Index due to tracking errors.
- Investment Horizon: Recommended for investors with a long-term perspective to mitigate short-term market volatility.
Conclusion:
The LIC MF Nifty 50 ETF offers a cost-effective avenue for investors to gain exposure to India’s leading companies. However, due to its high-risk classification, it is best suited for those with a long-term investment horizon and a tolerance for market volatility. As always, it’s prudent to consult with a financial advisor to ensure alignment with your individual investment objectives and risk profile.
LIC MF Nifty 50 ETF Top Holdings
The LIC MF Nifty 50 ETF is designed to replicate the Nifty 50 Index, providing investors with exposure to India’s top 50 blue-chip companies. As of September 30, 2024, the fund’s portfolio composition is as follows:
Top Holdings (by weightage):
- Reliance Industries – Oil & Gas
- HDFC Bank – Financial Services
- ICICI Bank – Financial Services
- Infosys – Information Technology
- Tata Consultancy Services (TCS) – Information Technology
- State Bank of India (SBI) – Financial Services
- Hindustan Unilever – FMCG
- ITC Limited – FMCG
- Bharti Airtel – Telecommunications
- Larsen & Toubro (L&T) – Construction/Infrastructure
Sector Allocation:
- Financial Services: 36.12%
- Information Technology: 14.12%
- Oil, Gas & Consumable Fuels: 12.34%
- Fast-Moving Consumer Goods (FMCG): 9.67%
- Automobile and Auto Components: 5.89%
- Healthcare: 4.12%
- Telecommunication: 2.98%
- Construction: 2.45%
- Metals & Mining: 2.34%
- Power: 2.12%
- Others: 8.85%
This diversified sector allocation ensures that investors gain broad exposure across key industries in the Indian economy.
Why Invest in LIC MF Nifty 50 ETF?
- Diversification: Exposure to 50 leading companies across sectors.
- Cost-Effective: Lower expense ratio compared to actively managed funds.
- Performance: Mirrors the Nifty 50 Index, offering consistent returns aligned with market movements.
LIC MF Nifty 50 ETF Returns
As of January 28, 2025, the LIC MF Nifty 50 ETF has demonstrated the following performance:
| Time Period | Returns (%) |
| 1 Year | 12.5 |
| 3 Years | 14.2 |
| 5 Years | 13.8 |
These figures are based on data available up to January 28, 2025. Please note that past performance is not indicative of future results, and it’s essential to consider your investment horizon and risk tolerance before making investment decisions.
LIC MF Nifty 50 ETF Direct Growth
As of January 24, 2025, the LIC MF Nifty 50 Index Fund Direct Growth has demonstrated the following performance:
| Time Period | Returns (%) |
| 1 Year | 11.99 |
| Since Inception | 12.86 |
The fund’s Net Asset Value (NAV) as of December 24, 2024, was ₹140.34.
Please note that past performance is not indicative of future results. It’s essential to consider your investment horizon and risk tolerance before making investment decisions.
LIC MF Nifty 50 Index Fund
The LIC MF Nifty 50 Index Fund is a passive mutual fund that aims to replicate the performance of the Nifty 50 Index. This index represents the top 50 companies listed on the National Stock Exchange (NSE) based on free-float market capitalization, and the fund aims to invest in these companies in the same proportion.
Here are some key details about the fund:
- Fund Type: Open-ended Equity Index Fund
- Benchmark: Nifty 50 Index
- Objective: To provide returns that closely correspond to the total returns of the Nifty 50 Index, subject to tracking errors.
- Risk Level: High (as it invests in equities, which are subject to market risks)
- Expense Ratio: Typically low compared to actively managed funds because of its passive nature.
Performance (as of January 2025)
- 1-Year Return: Approximately 11.99%
- Since Inception: Approximately 12.86%
Types of Plans:
- Direct Growth: The growth option in which earnings are reinvested into the fund.
- Regular Growth: The non-direct plan where you invest via intermediaries like brokers or distributors.
NAV (Net Asset Value):
- The NAV fluctuates based on the market performance of the Nifty 50 index and the overall portfolio of the fund. As of December 2024, the NAV of the LIC MF Nifty 50 Index Fund was ₹140.34.
Strengths of LIC MF Nifty 50 ETF:
(1) Diversification:
- The LIC MF Nifty 50 ETF invests in the top 50 companies listed on the NSE, offering instant diversification across various sectors such as IT, banking, FMCG, and energy. This reduces individual stock risk.
(2) Low Expense Ratio:
- As a passive investment, it has a lower expense ratio compared to actively managed funds. The cost-efficiency can help enhance long-term returns.
(3) Performance Tracking the Nifty 50:
- Since the fund tracks the Nifty 50 Index, it is designed to deliver returns that closely mirror the index’s performance, which historically has shown consistent growth over the long term.
(4) Transparency:
- Being an index-based fund, the underlying assets (the Nifty 50 Index stocks) are known, offering transparency about the portfolio holdings.
(5) Liquidity:
- As an ETF (Exchange-Traded Fund), it is traded on the stock exchange, offering good liquidity. You can buy or sell units during market hours, unlike mutual funds that have fixed transaction times.
(6) Long-Term Growth Potential:
- The Nifty 50 Index has historically provided good returns in the long run, making it suitable for investors with a long-term investment horizon.
Risks of LIC MF Nifty 50 ETF:
(1) Market Risk:
- Since the fund tracks the Nifty 50 Index, it is exposed to market risks. If the overall market or the Nifty 50 Index falls, the ETF’s value will also decrease.
(2) No Outperformance:
- Being a passive fund, it does not aim to beat the market. If you’re looking for alpha (returns above the market), this ETF may not deliver beyond the index’s performance.
(3) Sector Concentration Risk:
- The fund is heavily reliant on the Nifty 50 stocks, and some sectors like banking or IT might dominate the index. If those sectors underperform, the ETF could see a decline, even though other sectors may be doing well.
(4) Tracking Error:
- The ETF may not perfectly replicate the returns of the Nifty 50 Index due to tracking errors, which can arise from various factors like management fees, transaction costs, and minor differences in the portfolio composition.
(5) No Dividend Reinvestment:
- Most Nifty 50 ETFs do not reinvest dividends by default, meaning any income from dividends is paid out. However, this can be reinvested manually if the investor wishes.
(6) Economic Slowdowns:
- If there is a market-wide economic slowdown or a recession, the value of the ETF may drop, reflecting the downturn in the broader market.
Conclusion:
LIC MF Nifty 50 ETF is a good choice for investors seeking low-cost exposure to India’s top companies and looking for passive investment in the equity market. However, investors need to be aware of the risks, especially market risk and sector concentration, and should have a long-term investment horizon to benefit from the potential growth of the Nifty 50 Index.
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