Jio BlackRock Mutual Fund Gets Sebi Approval For 4 Passive Schemes; A Game-Changer For Indian Investors?
In a move that is expected to give Indian investors more options to invest in the stock market, Jio BlackRock Mutual Fund has received approval from the Securities and Exchange Board of India (Sebi) to launch four passive index funds.
The funds will track four indices – Nifty Midcap 150, Nifty Smallcap 250, Nifty Next 50, and the benchmark index tracking Indian government bonds with 8-13 years maturity.
Jio BlackRock Asset Management, a joint venture between Jio Financial Services Ltd and BlackRock, plans to leverage its digital reach to sidestep traditional distributor networks and offer differentiated products in the crowded market.
The asset manager has raised over $2.1 billion across three debt mutual fund schemes, attracting investments from 90 institutional investors and 67,000 retail investors so far.
Jio BlackRock’s plan to bypass the dominant channel of distributors and offer funds directly to institutional and retail investors is expected to reduce fee or expense ratios associated with the funds.
The company intends to use the distribution reach of its partner and target the existing 8 million active users of financial services on its digital platforms such as MyJio and Jio Finance.
BlackRock, the world’s largest fund manager at $11.6 trillion as of December 2024, is known for its passive funds, which track established indexes. It manages $7.8 trillion through exchange traded and index funds.
However, Jio BlackRock plans to offer a mix of active and passive funds in India, where active funds still dominate.
This development is expected to give Indian investors more options to invest in the stock market and benefit from the growth potential of the Indian economy.
What Are Passive Index Funds?
Passive index funds are a type of mutual fund that tracks a specific index or market segment. They are designed to replicate the performance of the underlying index or market segment, rather than trying to beat it.
Passive index funds are popular among investors because they are generally less expensive than actively managed funds and tend to have lower fees. They are also less susceptible to market volatility and can provide a stable source of returns over the long term.
How Do Jio BlackRock’s Passive Index Funds Differ From Other Mutual Funds?
Jio BlackRock’s passive index funds differ from other mutual funds in several ways. For one, they are designed to track specific indices or market segments, rather than trying to beat the market.
Secondly, they are managed using a passive investment approach, which means that the fund manager does not actively try to pick individual stocks or bonds. Instead, the fund manager simply tracks the underlying index or market segment.
Finally, Jio BlackRock’s passive index funds are designed to be low-cost and transparent, with fees that are lower than those of actively managed funds.
What Are the Benefits of Jio BlackRock’s Passive Index Funds?
There are several benefits of Jio BlackRock’s passive index funds. For one, they offer a low-cost and transparent way to invest in the stock market.
Secondly, they are designed to track specific indices or market segments, which can provide a stable source of returns over the long term.
Finally, Jio BlackRock’s passive index funds are managed using a passive investment approach, which means that they are less susceptible to market volatility and can provide a stable source of returns over the long term.
Conclusion
In conclusion, Jio BlackRock’s passive index funds are a game-changer for Indian investors. They offer a low-cost and transparent way to invest in the stock market, while also providing a stable source of returns over the long term.
With their ability to track specific indices or market segments and their low-cost and transparent management approach, Jio BlackRock’s passive index funds are a great option for investors who are looking to grow their wealth over the long term.
