Index Fund Corner
Sponsored
| Scheme Name | 1-Year Return | Invest Now | Fund Category | Expense Ratio |
|---|---|---|---|---|
| Axis Nifty 50 Index Fund | +32.80% | Invest Now | Equity: Large Cap | 0.12% |
| Axis Nifty 100 Index Fund | +38.59% | Invest Now | Equity: Large Cap | 0.21% |
| Axis Nifty Next 50 Index Fund | +71.83% | Invest Now | Equity: Large Cap | 0.25% |
| Axis Nifty 500 Index Fund | — | Invest Now | Equity: Flexi Cap | 0.10% |
| Axis Nifty Midcap 50 Index Fund | +46.03% | Invest Now | Equity: Mid Cap | 0.28% |
What is MF Lite?
MF Lite is a framework for mutual funds that will focus exclusively on passive investment products. These include index funds, exchange-traded funds (ETFs), funds of funds (FoFs), and more.
Unlike actively managed funds, which rely on fund managers making decisions, passive funds track a specific market index or portfolio.
This makes passive funds cheaper to manage and more straightforward for investors.
Key features of MF Lite
- The framework reduces operational burdens by easing compliance requirements. Fund houses will benefit from lower costs and fewer regulations when launching passive funds.
- Sponsors of MF Lite funds must have a minimum of 20 years of collective experience in key positions. Additionally, private equity funds can sponsor MF Lite entities under certain conditions.
- By focusing on passive strategies, these funds can offer low-cost investment options. This benefits both fund houses and retail investors, making investing more affordable.
- The introduction of this framework is expected to improve market liquidity by attracting new players and fostering competition.
- MF Lite mandates regular portfolio disclosures. Equity passive schemes must disclose quarterly, while debt passive funds will do so monthly.
Who will benefit?
MF Lite will create more affordable options for retail investors. With a focus on passive strategies, investors can access low-cost funds that track equity or debt markets.
New entrants, especially smaller mutual fund houses, will find the relaxed compliance environment ideal for launching their products without the complexity of managing active funds.
Current mutual funds that manage both active and passive schemes can now separate their passive portfolios into a distinct entity under MF Lite. This allows them to focus solely on growing their passive assets.
Why is MF Lite important?
MF Lite aims to simplify the entry process for new players in the mutual fund industry. It is expected to increase market participation and liquidity, while also offering investors more affordable investment opportunities.
The new rules will come into effect on March 16, 2025, giving entities time to adjust to the simplified compliance requirements.
