A Review of Indian Index Funds

Subhrangshu Sekhar Sarkar, Santanu Dutta and Pinky Dutta
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Subhrangshu Sekhar Sarkar: Subhrangshu Sekhar Sarkar is Professor at the Department of Business Administration, Tezpur University, Assam, India. E-mail: subh@tezu.ernet.in
Santanu Dutta: Santanu Dutta is Associate Professor at the Department of Mathematical Sciences, Tezpur University, Assam, India. E-mail: tezpur1976@gmail.com

Global Business Review, 2013, vol. 14, issue 1, 89-98

Abstract: An index fund is a mutual fund that aims to imitate some benchmark index. There are several advantages of investing in an index fund, namely, exposure to a diversified portfolio, minimization of company-specific risks, high liquidity, etc. In India, there has been a significant growth in the number of index funds from 2002 onwards. Today there are more than 20 index funds imitating the NIFTY or SENSEX. In this article, we review and compare a number of Indian index funds. The CRISIL composite ranking of an index fund reflects the quarterly performance of that fund and is subject to fluctuations. We are interested in those index funds that do not deviate significantly from the underlying benchmark index in the long run. This ensures that an investor gets the benefit of any strong rally in the benchmark index, which the index fund imitates. We identify some index funds that satisfy our criteria, and are also ranked above three (indicating above average performance) in the CRISIL rankings of March 2011 and December 2010.

Keywords: Indian index funds; cointegration; CRISIL composite ranking (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:sae:globus:v:14:y:2013:i:1:p:89-98

DOI: 10.1177/0972150912466445

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