Read in: 1min, Published On , 25 Feb 2020 By Times Of India
HOW TO BUY THE SENSEX, NIFTY IN ONE GO
Index funds allow this unique opportunity that could be used by first time investors for wealth creation
These funds passively track the performance of the underlying index. Since these are not actively managed, these funds charge very low fees to investors compared to other actively managed funds.
Index funds are more suited for risk-averse investors and those expecting predictable returns, provided these schemes meet the risk profile of the investors. These funds also offer ample scope for diversification to one’s equity portfolio.
These funds carry only the market related risks but eliminate the fund manager-related risks to investments. So if an investor wishes to participate in equities but wants to eliminate the risks associated with actively managed equity funds, he/she could choose an equity index fund. These funds give returns matching the underlying index.
Index funds could be used by first time investors as a safer bridge towards creating long term wealth through the equity market route.