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Nifty 50 is seen as the default index fund to own if you want to buy market leaders – after all, it includes the 50 largest companies by market capitalisation.
But UTI’s newly launched BSE Sector Leaders Index Fund may be a smarter alternative as it selects the top 3 companies in each of the 20 sectors available in the market to create a 60 stock index – thus giving you leaders across all sectors in a single fund.
To ensure inclusiveness and broad representation, stocks are capped at 5% of index and the minimum weight is set at 1%.
This ensures that small sectors like realty, textiles etcg et adequate representation (as they get a minimum 3% allocation – 1% each for the 3 leaders) – a feature that you can’t find even in a broad market index like Nifty 500.
The BSE Sector Leaders index has over the last 21 years, delivered an incremental 1% to 1.5% return over Nifty 50 with lower volatility than the Nifty50 – making it a superior choice on a risk adjusted as well as absolute basis.
