Question 1

What is tracking error and how does it affect NIFTY ALPHA LOW-VOLATILITY 30 index funds?

Accepted Answer

Tracking error measures the annualized standard deviation of daily return differences between an index fund and the NIFTY ALPHA LOW-VOLATILITY 30 benchmark. A lower tracking error indicates that the fund manager replicates the index with minimal drift and tighter cash drag management.

Question 2

How does the total expense ratio (TER) impact long-term returns for NIFTY ALPHA LOW-VOLATILITY 30 index funds?

Accepted Answer

The total expense ratio (TER) is the recurring annual management fee deducted from fund NAV. In passive index investing tracking NIFTY ALPHA LOW-VOLATILITY 30, selecting direct growth plans with lower expense ratios compounds over 3Y, 5Y, and 10Y horizons into significantly higher net wealth accumulation.

Question 3

What is the difference between tracking error and tracking difference for NIFTY ALPHA LOW-VOLATILITY 30 funds?

Accepted Answer

Tracking difference is the cumulative absolute return gap between the fund and the NIFTY ALPHA LOW-VOLATILITY 30 benchmark over a specific holding period (primarily driven by TER and transaction costs), whereas tracking error measures the volatility of daily excess returns over time.

NIFTY ALPHA LOW-VOLATILITY 30 funds and ETFs

Results by holding period

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NIFTY ALPHA LOW-VOLATILITY 30 funds and ETFs

Results by holding period

Index fund comparison is not available yet