How to buy the sensex nifty in one go

Read in: 1min, Published On , 25 Feb 2020 By Times Of India


Index funds allow this unique opportunity that could be used by first time investors for wealth creation

  • Index funds are mutual funds that invest in an index by purchasing all the stocks in the same proportion as in a particular index. So the performance of these funds nearly mirrors that of the indices they track, but for a small difference called tracking error.
  • 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.