An Index Fund Suitable for Investors Following
Shariah Principles..!
Shariah Index Fund
Hasan Ali, Founder, SIP Tiger
UTI Mutual Fund has
launched the UTI
Nifty500 Shariah Index Fund, an index fund designed for
investors who follow Shariah principles. Let us look at its key features.
1. Basic Scheme Details
·
Mutual Fund House: UTI Mutual Fund
·
Scheme Name: UTI Nifty500 Shariah Index Fund
·
Type: Open-Ended Index Fund
·
Category: Other Scheme – Index Funds
·
NFO Closing Date: 18 February 2026
·
Entry Load: Nil
·
Exit Load: Nil
·
Minimum Investment: ₹1,000
2. Investment Objective
·
The fund is
designed to track the Nifty500 Shariah Index.
·
It aims to
deliver returns, before expenses, that correspond to the total returns of the
underlying index.
·
Tracking error
may occur — meaning there could be a slight difference between the returns of
the index and the fund.
3. What is the Nifty500 Shariah Index?
·
From the Nifty
500 universe of stocks,
·
Only companies
that comply with Shariah principles are selected.
·
Sectors typically
excluded include:
o
Interest-based
banking & NBFCs
o
Alcohol
o
Gambling
o
Tobacco
o
Certain types of
financial services
Therefore, it is suitable for investors
seeking ethical investments.
4. Investment Approach
·
This is a passive
fund. The fund manager does not actively select stocks.
·
Stocks in the
index are purchased in the same proportion as the index.
·
Generally comes
with a lower expense ratio compared to active funds.
5. Who Is It Suitable For?
·
Investors who
follow Shariah principles
·
Those seeking
long-term equity exposure
·
Investors who
want exposure to large-cap, mid-cap, and small-cap stocks within a single
scheme
·
Those who prefer
a passive investment strategy
6. Advantages
✔️
Diversification – Selection from 500 companies
✔️
Ethical investment approach
✔️
No exit load – Freedom to redeem
✔️
Low minimum investment of ₹1,000
7. Risks
·
Market volatility
(stock market fluctuations)
·
Tracking
differences between the index and the fund
8. Long-Term Perspective
·
Ideally suited
for investment horizons of 5 years or more.
·
Investing through
a Systematic Investment Plan (SIP) can help manage market volatility.
9. Important Points to Note
·
The expense ratio
will be announced later.
·
The fund’s NAV
will fluctuate daily.
The UTI Nifty500 Shariah Index Fund provides
a broad-based equity investment opportunity in India for investors who wish to
follow Shariah principles through a passive index strategy.
For those seeking long-term growth with an
ethical investment approach, this may be a suitable option. Before investing,
consider your risk appetite and financial goals carefully.
For further details and
investment guidance:
Hasan
Ali,
Founder, SIP
Tiger
(https://siptiger.com/).
With 16
years of experience in financial services, he undertakes all types of mutual
fund distribution and financial planning services.
To read
articles written by Hasan Ali in the leading personal finance magazine Naanayam Vikatan, please visit: http://bit.ly/4tyI6qb
SIP TIGER
AWFIS
(Near Mount Road Gemeni Flyover), 8th Floor, Nungambakkam, Chennai – 600 034
Working hours:
Monday - Friday
10 am to 5 pm EST
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