Investing•5 min read•Oct 12, 2024
The Ultimate Guide to Index Funds in India
Why passive investing is often the winning strategy for long-term wealth creation in the Indian market.
Why Index Funds?
Index funds have gained massive popularity in India over the last decade. Unlike active mutual funds, where a fund manager tries to beat the market, an index fund simply mimics a market index like the Nifty 50 or Sensex.
Lower Costs, Higher Retention
One of the biggest advantages is the low expense ratio. Active funds might charge 1-2%, while index funds often charge less than 0.2%. Over 20 years, this difference compounds significantly.
No Fund Manager Bias
You don't have to worry about a manager making a bad call. If the Indian economy grows, the top 50 companies (Nifty 50) will generally grow, and so will your investment.