Passive Fund on WebNotes

Tracking error in mutual funds

Tue, 19 May 2026 00:00:00 +0000

Tracking error is the standard deviation of the difference between a passive mutual fund’s returns and its benchmark index’s returns over a given period. The metric measures how closely a passive scheme replicates its underlying index: low tracking error indicates tight replication, high tracking error indicates significant deviation. For Indian passive investors, tracking error is the principal quality metric distinguishing well-managed from poorly-managed index funds and ETFs.

For passive investors choosing between competing NIFTY 50 index funds , NIFTY 500 index funds , or other index-tracking schemes, tracking error directly affects realised returns vs the index. Two index funds nominally tracking the same NIFTY 50 can deliver materially different returns over multi-year periods due to differing tracking errors.

Mirae Asset Mutual Fund

Tue, 12 May 2026 00:00:00 +0000

Mirae Asset Mutual Fund is an Indian asset management company , formally Mirae Asset Investment Managers (India) Private Limited, and the Indian operations of the Mirae Asset Global Investments group of South Korea. It is regulated by the Securities and Exchange Board of India under registration MF/055/07/03 and, as on April 2026, managed Rs 2,29,930 crore in assets per the AMC’s own corporate disclosure, placing it among India’s ten largest fund houses. Mirae Asset entered India in 2008 and built that book almost entirely through organic inflows, without a single AMC acquisition.

NIFTY 50 index fund

Tue, 12 May 2026 00:00:00 +0000

A NIFTY 50 index fund is a passive open-ended equity scheme that replicates the NIFTY 50 index by holding the same 50 stocks in the same proportions (by free-float market capitalisation weight) as the index, with the objective of generating returns equal to those of the NIFTY 50 Total Return Index (TRI) net of expenses and tracking error. SEBI ’s October 2017 categorisation circular permits AMCs to operate multiple index funds tracking different indices, making NIFTY 50 index funds the most widely available and oldest passive equity category in India.

SEBI Mutual Fund Lite framework (India)

Tue, 12 May 2026 00:00:00 +0000

The SEBI Mutual Fund Lite (MF Lite) framework is a simplified registration and operational regime introduced by SEBI in 2024 to encourage new entrants to establish asset management companies (AMCs) that offer exclusively passive investment products, index funds and Exchange-Traded Funds (ETFs), without the full regulatory burden applicable to active fund management. The MF Lite framework was finalised through SEBI’s circular and amendments to the SEBI (Mutual Funds) Regulations, 1996 in 2024, following consultation papers issued in 2022 and 2023. The primary policy objective is to increase competition in India’s passive fund segment (which has historically had fewer participants than the active segment), lower costs for investors, and enable fintech, technology, and financial services companies with strong distribution capabilities to enter the market without meeting the full net worth and track record requirements of traditional AMC registration. The framework is administered by the SEBI Investment Management Department .