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I have some investments in ICICI Prudential Equity Savings Fund and ICICI Prudential Multicap Fund. In view of the current scenario, would it be wise to move at least a part of it to ICICI Prudential Nifty Index Fund (Direct) so that I can benefit from the combination of the index jumping and the low cost? Which fund in your view will perform better - ICICI Prudential Multicap Fund or ICICI Prudential Nifty Index Fund?
- Gaurav
If you're going to hold your investments for five years or more, then I'm confident that the multicap fund will beat the index fund. I agree that index funds come at a low expense ratio but they also have a constraint in the sense they aren't very smart. With all the turbulence that I see right now, I feel that there will be things that will be very grossly underweighted in the index over a longer period of time.
Further, although many actively managed funds were not able to beat the index in 2019 and their high expenses, I hope that multicap and diversified equity funds, which are actively managed by fund managers, will be able to beat the index by a wide margin.
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