Many investors keep searching for better funds for investment. In today's time, there are many options available from stock market to bank FD and mutual funds. If you talk about mutual fund segment, there are many different categories of funds like index funds, hybrid funds, sectoral funds etc. Now the question is arising here that which of these is the best in terms of returns. Zerodha Fund House has recently conducted a study regarding this.
According to a study conducted by Zerodha fund house, index funds have seen a strong growth in Systematic Investment Plan (SIP) assets under management (AUM) in the last one year, which has reached close to 85%. The number of live SIP accounts has also increased by almost 80% during the same period. Index funds were introduced to help investors overcome the challenges associated with selecting a portfolio of securities that suits their financial objectives.
Individual investors account for more than 60% of all index fund AUM as of September 30, 2024, while the remaining AUM is held by corporates and other institutions. Although the average ticket size of index funds is similar to the industry as a whole, the growth rate of index funds has been higher at 14% compared to 8% for the industry as a whole.
The index fund category has seen a 12-fold increase in its contribution to the mutual fund industry's folios in the last 5 years, as highlighted in a study conducted by Zerodha Fund House. Vishal Jain, CEO, Zerodha Fund House, said that as awareness and reach increases, index funds are poised to become an easy and affordable investment option for retail investors who want to invest in the Indian economy in a simple and affordable manner. want.
Index funds have shown strong growth in SIP sizes compared to other mutual fund categories. The average ticket size in index funds increased by 14%, surpassing the industry-wide increase of 8%. This trend reflects the growing confidence in index funds as a reliable investment option. Index funds have gained a larger share in the total mutual fund folios in the last five years. In September 2019, index funds accounted for only 0.43% of the total folios in the industry. By September 2024, this share had increased to about 5%.
