Index Fund: Due to the new variant of the corona virus Omicron, there is volatility in the markets around the world. In such a situation, investors are looking for such options in which they can earn great profits from the market at a low risk.
Index Fund: There is volatility in the markets around the world due to the new variant of the corona virus, Omicron. In such a situation, investors are looking for such options in which they can earn great profits from the market at a low risk. One such option is index funds which are similar to equity funds and track the movement of an index like Sensex or Nifty. This means that if an index fund tracks the Nifty 50, then the stronger the Nifty 50 is, the more the index fund will.
Why invest money in Corporate Bond? What are the things to keep in mind while investing? Know the answer to all these questions
This is how Index Fund works
If an index fund tracks Nifty 50, it means that the money invested in it will be invested in stocks in the same proportion as these are included in the Nifty 50 index. This means that instead of buying individual stocks through index funds, investors are investing in them in a ratio. Investing in an index fund that tracks the Nifty 50 index means investing in 50 stocks and taking advantage of these gains.
Mutual Fund Investment: How right is it to invest money in Fund of Funds? Know under what circumstances there is scope for more return on investment
Benefits of investing in index funds
- If you want to invest in equities but are afraid of market volatility, then index funds can prove to be a better option.
- The asset allocation under the index is the same as that of the underlying index i.e. the returns from it are according to the underlying index.
- These funds are managed passively i.e. the fund manager does not have to actively decide which stocks to buy or sell. Due to this, the benefit of low expense ratio is available on investment in it.
- There are many types of index funds in the market such as IDFC Nifty Direct Plan Growth, ICICI Prudential Sensex Fund, Nippon India Index Fund Sensex Plan Direct Growth, HDFC Index Sensex Direct Plan Growth, UTI Index Nifty Fund, ICICI Prudential Nifty Index Direct Plan Growth etc. are available for.
Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.
.