Index Funds

Index funds refer to equity funds that concentrate on a specific index such as Nifty, BSE. The key aim in investing in such index funds is to get returns that equal the returns of the index during a specific time period. The funds invest the money in stocks which are a part of the particular index. The ratio of money invested in various stocks is equal to the ratio of the shares in the index.

During any trading session, ETF index funds can be purchased and sold at the prevailing rates and so are similar to purchase and sale of shares. Demat account is compulsory for transacting in Exchange Traded Index funds ( ETFs). For non ETF index funds, demat account is not required and investment can be made with just a bank account as in case of normal MFs.

Tracking error is the differentiator when it comes choosing one index fund against the other. Tracking error is the extent to which the NAV of the index funds move in a manner that is inconsistent with the movements of their respective indices during a given period.

Average 1 year return from index funds as of 6th Dec 07 45.42%*

Returns proportionate to index

* returns data from valueresearchonline


Anonymous said...

I am looking for a software as a individual investor to check my investments in various companies and sectors that I have made via 10-12 Mutual funds that I have bought in last couple of years. Any help/software would be greatly appreciated.

Cheers. May God Bless ALL.

Ideasmoney said...

you can use portfolio tracker tools available in various websites like,,,etc to track your investments.

Anonymous said...

A lot of people have suggested to me to Invest in Index funds.Is that a good options (Since they are nicely diversified).Can you suggest some good index funds.

Ideasmoney said...

There are a lot of sites like value research and mutualfunds india which give the perfomance of various index funds over the years . you can choose from the consistent performers to invest.


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