Skip to content
  • English
  • Business
  • Entertainment
  • National
  • Lifestyle
  • Education
Daily News India

Daily News India

Just another WordPress site

  • English
  • Business
  • Entertainment
  • National
  • Lifestyle
  • Education
  • Toggle search form
  • inDrive’s “Set Your Price” Feature is Simplifying Car Rides in Mumbai & Pune Business
  • Kautilya Academy Achieves Success in MPPSC Examination Lifestyle
  • OSL Handles Heavy-Lift Cargo Export 1st Time from Odisha’s Paradip Port Business
  • Ahmedabad welcomes Yaariyan 2 cast with open arms and vibrant Navratri Celebration Entertainment
  • Synonym for Gearless Elevator Machine in India – Tectronics Techworld Pvt Ltd Business
  • Chiragkumar Limbasiya, Pioneering the future of lab-grown diamonds Business
  • First Funding To Organize A Startup Event Pitch First 1.0 In February With 100+ Investors Business
  • Events like TEDx ought to be supported for city’s youth: Ketan Mohitkar Business

Stocks vs Equity Fund vs Index Fund By Sidhavelayutham, CEO & Founder, Alice Blue

Posted on July 20, 2023 By

Sidhavelayutham, CEO & Founder, Alice Blue

Bangalore (Karnataka) [India]: Equity investment is simple, but it requires perseverance, resilience and the right amount of determination to achieve success. Over the last few years, especially post-Covid-19, the world has gone through major economic events such as the Russia-Ukraine war, soaring inflation, the 2-year US treasury yields hitting 16 years high, commodity prices going through the roof, continuous lockdowns by China and others. These geopolitical tensions led to a global supply chain issue. Despite all of this, the Indian markets performed relatively better than other major global equity markets. In FY23, the US Dow Jones fell about 4.05%, while the Hang Seng declined by 7.2%. On the other hand, the Nifty remained flat at -0.6%. The Indian economy certainly had a stronger macroeconomic situation than other countries.  

In fact, the Indian equity market witnessed a staggering 2.5 crore new demat accounts being opened in FY23. The industry has grown from just 3.59 crore demat accounts in FY19 to 11.45 crore demat accounts in FY23. The DIIs took the market to new highs on 1 December 2022 at 18887 levels. They poured in above 2.5 lakh crore in the cash market. The FIIs suffered the fear of missing out and started putting in their money from March 2023 onwards. If one looks at Q1FY24 (Apr-Jun 2023), FIIs have poured in more than Rs. 60,800 crores in the cash market, taking the market to new life-highs of above 19700 levels now. 

From a risk-return perspective, equity returns can be significantly higher than an equity/index fund; however, the investor also needs to understand the extent of price risk involved. For instance, if someone has invested Rs. 10 lahks in a stock, which goes down by 10%, the capital erosion would be to the extent of Rs. 1 lakh, however, had the same investor invested in an equity fund, the fund would have gone down by say just 2-3% as it has a lower concentration risk (at least 25 stocks in the fund scheme) resulting in diversification benefit. In fact, if the investment would have been made in an index fund, say a Nifty 50 index fund that comprises the highest market-cap weighted securities, the volatility risk would have been much lower along with a flat to positive returns possibility. 

Have a look at this detailed comparison, where investing in just Cipla stock would have yielded a 6.75% return. If someone had relied on a midcap equity fund like ICICI Midcap Select, he/she would have made a 15.58% gain over a period of the last 12 months. However, if the investment had been into a passive index fund, the returns would have been a staggering 21%.    

Over the last few years, the mutual fund industry has also been instrumental in bolstering the financial savings of the retail investors of the country. Over the last 10 years, the AUM of the Indian mutual fund industry has grown over 5 times from Rs. 8.1 lakh crore (June 2013) to      Rs. 44.39 lakh crore (June 2023). Additionally, the number of mutual fund folios has also reached 14.91 crore in June 2023 as against 14.73 crore in May 2023. The SIP contribution in the last 4 years has risen by more than 68% from Rs. 92,700 cr (FY19) to around Rs. 1,56,000 cr (FY23). In fact, the SIP monthly contribution touched an all-time high of Rs. 14,749 cr in May 2023.  

The way one participates in the market will completely depend on the investors’ market acumen, time involvement and risk profile. If a person has completed the required education (say a CFA/CA/MBA Finance) or has experience in understanding financial statements, assessing corporate governance and its red flags etc., he/she can go ahead and invest directly into stocks. However, if the investor is risk-averse despite the education/experience, then he/she can surely go for an equity/index fund. 

Equity funds are an active form of investment where the fund manager tries to generate alpha and beat the benchmark index resulting in a higher expense ratio for the investor. On the contrary, Index funds are a passive form of investment, where the role of a fund manager is limited as the fund directly mirrors the returns of an index, say Nifty 50, leading to a significantly lower expense ratio.   

Hence, it is the choice of the investor whether he/she wants to invest in stocks, equity funds or an index fund. Although all these instruments have their pros and cons, their suitability differs. 

For more details, log into www.aliceblueonline.com

If you have any objection to this press release content, kindly contact pr.error.rectification[at]gmail.com to notify us. We will respond and rectify the situation in the next 24 hours.

Business Tags:Business

Post navigation

Previous Post: Launch Your Medical Coding and Billing Internship with CodersGrade: A Pathway to Success
Next Post: Rahul Singh Bhandari: A Journey from Gauchar to Influencer Stardom

Related Posts

  • Shivam Developers honored with Trendsetter 2022 award for being innovative leader in real estate Business
  • DonnyJ: Decoding A Musical Enigma Business
  • Pioneering Safety and Innovation, Kranthi Kumar S Guides TRiDE Mobility’s AI-Driven Roadmap Business
  • XL Dynamics Conducts Vaccination Drives in Mumbai and Noida Business
  • Dr. Deepak Shenoy Honored with Global Visionary Entrepreneur Award, Medec Dragon Pvt Ltd Wins Best Managed Pharmaceutical Sustainable Organizations 2023  Business
  • Easy Trip Planners’ board to meet on Jan 24 to consider acquisition proposals Business

Recent Posts

  • Mehul Colours Limited IPO Opens on 30th July, 2025
  • Homeopathy Gave Me a New Life: Lalaram Yadav’s Triumph Over Aplastic Anemia
  • Imaad Counseling Coaching & Skills Academy: Pioneering Emotional Excellence
  • Mold-Tek Packaging announces stellar Q1FY26 Results, PAT stood at Rs 22.40 crore
  • New Age Travelers Drive Demand for High-End Eco Resorts in Goa

Recent Comments

  • Unknown on Participants Reap Rewards in Wellman’s 8-Week Digital Campaign: IPL Tickets, Autographed Virat Kohli Merchandise, and More!
  • ITF Foods Revolutionizes Street Food with World Record 122 Panipuri Flavors and Innovative Safe Panipuri Vending Machines Business
  • MICL Group’s Aaradhya Highpark project receives Occupancy Certificate; yet another delivery before time Business
  • Shashaank Somani reveals Somani Surfaces’ new experience showroom for veneer, laminates, plywood and hardware fittings Business
  • Astrologer Ravi Joshi: The Celestial Navigator of Love and Relationships Lifestyle
  • Mega fruit tree plantation drive commenced for preserving natural habitat for animals Press Release
  • Vishal Jewels Celebrates 10 Years of Excellence in Hallmark Gold and Certified Diamond Jewellery Business
  • Easier to build a strong child than to repair broken man Lifestyle
  • Sacred Weaves At Office Inauguration Ceremony of Meta in Gurgaon Business

Copyright © 2025 Daily News India.

Powered by PressBook News WordPress theme