Index Funds

  In the recent past, index funds have become one of the most sought-after mutual funds. Investing in exchange-traded funds and index funds receives a lot of positive press, and for a good reason. At their best, index funds provide a low-cost way for investors to track popular stock and bond market indexes. 

An index fund is a mutual fund that mimics the portfolio of an index. These mutual funds are also known as index-tied or index-tracked funds. These funds are managed passively because the primary goal of index funds is to track and replicate the performance of a popular stock market index such as the S&P BSE Sensex and NSE Nifty 50. 

Since index funds are not actively managed by investors, they have low expenses. They don't seek to outperform the market but rather follow an index. They aid investors in managing or balancing the risks in their investment portfolio.

Index funds in India are ideal for investors who want consistent returns. These funds do not necessitate extensive monitoring. For instance, if you want to invest in equities but don't want to take risks associated with actively managed equity funds, you can opt for a Sensex or Nifty index fund. These funds will provide you with returns corresponding to the index's upside. 

A significant advantage of investing in index funds is that the costs, including taxes and management fees, may be lower than those of other types of investment funds.

The first cost to consider is the management fee that each fund manager receives each year. The fund's expense ratio determines the amount of the fee, which varies depending on the value of your holdings. If you invest Rs 1,000 in a mutual fund with a 1% expense ratio, you will pay Rs10 in management fees.

It doesn’t matter how the individual stocks perform, the overall stock market gains value over time. As a result, index funds generally provide high returns at a low cost, making them an excellent value for any investor.

Index funds, in general, are appropriate for investors with a long time horizon.

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

When placing your order in Mutual Funds, kindly select "YES" when prompted if you are assisted. You will need to input my Employee Unique Identification Number. EUIN: E484653 and ARN 259045.

WhatsApp, 📞 9845211825, inbox here for hassle-free online investing in Mutual Funds.

Prajval Madhav Uchil 

Mutual Fund Distributor. 

EUIN: E484653 l ARN 259045.

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