Diversify Your Portfolio with Angel One Nifty Total Market Index Fund and ETF

Angel One Mutual Fund has launched Angel One Nifty Total Market Index Fund and ETF, it is an open-ended scheme replicating/tracking Nifty Total Market Index.

The Indian equity market is currently navigating through a phase of volatility and uncertainty. With geopolitical tensions, global inflationary pressures, and concerns about tightening monetary policies, investors are facing an unpredictable landscape. As the market fluctuates, investors are looking for ways to achieve diversified exposure while mitigating risks associated with short-term market swings.

[Read: RBI Slashes Repo Rate to 6.25%: Will It Fuel Growth or Stir up Challenges for Key Sectors?]

One way to gain broad exposure while reducing the impact of volatility is through a fund with diversified allocation across market caps.

The launch of Angel One Nifty Total Market Index Fund and ETF comes at a time when investors are looking for ways to navigate the volatile market environment, and a diversified index fund like this may provide a solid foundation for long-term growth in your investment portfolio.

What will be the investment strategy for Angel One Nifty Total Market Index Fund and ETF?

Angel One Nifty Total Market Index Fund and ETF will be passively managed index fund which will follow an investment approach designed to track the performance of Nifty Total Market TRI. The Scheme seeks to achieve this goal by investing in securities constituting the Nifty Total Market Index in the same proportion as in the Index. The fund house will not make any judgement about the investment merit of the individual security constituting the Nifty Total Market index nor will it attempt to apply any economic, financial or market analysis.

The Scheme will follow a passive investment strategy. The performance of the Scheme may not be commensurate with the performance of the benchmark of the Scheme on any given day or over any given period. Such variation is commonly referred to as the Tracking Error.

The investment strategy would revolve around reducing the Tracking Error to the least possible through regular rebalancing of the portfolio, taking into account the change in weights of the securities in the index as well as the incremental subscriptions/redemptions from the Scheme.

About Nifty Total Market Index

The Nifty Total Market Index will track the performance of 750 stocks covering large, mid, small and microcap segments. All stocks that are part of Nifty 500 index and Nifty Microcap 250 index form part of the Nifty Total Market index.

This index offers a comprehensive view of market trends by covering a wider universe of stocks. It helps investors track the overall performance of India's corporate sector rather than just blue-chip stocks.

With its diverse sectoral representation, the index captures economic shifts across industries, making it a valuable tool for passive investing. As India's equity markets continue to expand, this index provides a better reflection of long-term growth opportunities beyond the traditional large-cap-heavy benchmarks.

ETFs and index funds tracking this index allow investors to gain broad-based exposure, making it an ideal choice for those looking to participate in India's overall market growth.

How will the scheme allocate its assets?

Under normal circumstances, Angel One Nifty Total Market Index Fund and ETF will hold an allocation of 95% to 100% in Equities and equity related securities constituting Nifty Total Market index (including stock and index derivatives) and 0% to 5% in Cash & Cash Equivalents and Money Market instruments, Reverse Repo and / or Tri-Party Repo on Government Securities and / or Treasury bills and/or units of money market / liquid schemes.

Should investments in Angel One Nifty Total Market Index Fund and ETF be considered?

Angel One Nifty Total Market Index Fund and ETF offer investors a unique opportunity to gain exposure to the entire Indian equity market. Unlike traditional index funds that track only large-cap stocks like the NIFTY 50, this fund follows the NIFTY India Total Market Index, which includes large-cap, mid-cap, and small-cap stocks. This broader coverage allows investors to benefit from growth across different market segments, making it a well-diversified investment option.

While large-cap stocks provide stability, mid-cap and small-cap stocks offer higher growth potential. By investing in a fund that tracks the total market, investors can balance risk and reward effectively, making it an attractive option for long-term wealth creation. Additionally, this fund benefits from India's strong economic growth, expanding corporate landscape, and rising retail participation in the stock market.

However, the current market environment brings a layer of uncertainty and volatility that investors should consider. The geopolitical tensions, global inflationary pressures, and potential tightening of monetary policies are contributing to market fluctuations. These factors can lead to short-term market instability, affecting even the broader indices.

As the fund includes companies across all market capitalizations, it may experience volatility, especially in mid and small-cap stocks, which are often more sensitive to market swings.

Index funds and ETFs generally have a lower expense ratio compared to mutual funds, making them a cost-effective way to invest in the Nifty Total Market Index. However, for investors who prefer SIP investments, the index fund may be a more suitable choice. Additionally, liquidity in ETFs depends on trading volumes, so investors should check whether the ETF has sufficient market activity before investing.