Your Questions Answered: What are the pros and cons of investing in the Nifty Total Market Index?

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Arti Mohan, Cherrapunji, Meghalaya A total market index is a stock market index that typically tracks the performance of publicly traded companies from different market segments including largecap, midcap and smallcap. Total market indices are designed to provide a broad representation of the overall stock market, and they are often used as benchmarks for investment performance. A total market index fund is a type of mutual fund or exchange-traded fund (ETF) that tracks a total market index.

When you invest in a total market index fund, you are essentially buying a small piece of every company in the index. This gives you instant diversification across a wide range of stocks and sectors. The Nifty Total Market Index is a total market index that tracks the performance of 750 stocks covering large, mid, small and microcap segments via a single index.

Companies that are part of the Nifty 500 index or the Nifty Microcap 250 index constitute the Nifty Total Market index. Stock’s weightage is calculated based on its free-float market capitalization. This means that the largest companies in the index have the biggest impact on its performance.

Diversification: Total market index funds provide broad diversification across a wide range of stocks and sectors. This can help to reduce your risk of loss, as your investment is not concentrated in any one company or sector. Low cost: Total market index funds are typically very low-cost investments.

This is because they are passively managed, meaning that the fund manager does not try to beat the market. Simplicity: Total market index funds are very simple to invest in. You can buy and sell them just like any other stock or ETF.