Birla Index Fund: Unattractive.

(From Business Line)

BIRLA Index Fund, a passive Index Fund tracking the S&P CNX Nifty is currently open for subscription. Though this appears to be a good time to enter the equity market, investors (especially those with no equity investments in mutual funds) may avoid taking exposures in this fund for the present. This recommendation is not a reflection of the fund management track record of Birla Mutual Fund. Rather, it has to do with the unattractiveness of index investing per se.

Two factors make passive index investing unattractive in the Indian context. One, indices such as the S&P CNX Nifty (which Birla Index Fund plans to track) represent too few …