ET IN THE CLASSROOM: Index funds
Index funds are getting popular with investors as they offer a simple and low-cost way to gain exposure to a broad and diversified portfolio.
WHAT IS AN INDEX FUND? An index fund is a type of mutual fund or exchange-traded fund (ETF) that tracks the performance of a market index by buying the same stocks or bonds as the index. These funds aim to replicate the investment returns of particular benchmark indices by holding a securities portfolio that closely mirrors the index’s composition.
WHAT ARE THE EQUITY INDEX FUNDS IN INDIA?
Best MF to invest
Looking for the best mutual funds to invest? Here are our recommendations.
View Details» <div data-placement=«Mid Article Thumbnails» data-target_type=«mix» data-mode=«thumbnails-mid» style=«min-height:400px; margin-bottom:12px;» class=«wdt-taboola» id=«taboola-mid-article-thumbnails-114266240»>The Indian market has several equity-oriented index funds. Some popular index funds are based on broad indices — Nifty 50, S&P BSE Sensex, Nifty 100, Nifty Midcap 150, Nifty Smallcap 250, Nifty 500 and the Nifty Total Market Index; and thematic indices based on IT, pharma, consumption, manufacturing, defence, among others. There are international index funds as well, which are based on the Nasdaq 100 and the S&P 500.
WHO SHOULD INVEST IN THESE SCHEMES? Index funds work well for first-time investors in mutual funds who are keen to invest in equity, want to keep things simple and want a low-cost product but do not know which scheme to choose or how to go about the process, or do not have access to an advisor. It also works well for investors with a long-term horizon of over ten years who do not want the risks associated with active equity funds, such as changes in the fund manager or fund
