Close Menu
    Facebook X (Twitter) Instagram
    • Contact Us
    • About Us
    • Write For Us
    • Guest Post
    • Privacy Policy
    • Terms of Service
    Metapress
    • News
    • Technology
    • Business
    • Entertainment
    • Science / Health
    • Travel
    Metapress

    How to invest in index fund in India?

    Lakisha DavisBy Lakisha DavisMay 14, 2021
    Facebook Twitter Pinterest LinkedIn Tumblr Email
    How to invest in index fund in India?
    Share
    Facebook Twitter LinkedIn Pinterest Email

    In India we have two broad indices: Nifty and Sensex. Nifty is managed by National Stock Exchange and Sensex is managed by Bombay Stock Exchange. According to research, you can outperform 95% of the investors if you invest in an index fund. That means that it is very difficult to outperform the index.

    What is an index fund?

    Index funds are mutual funds that aim at mimicking the broader market index. You all know the benefits of diversifying your portfolio. When you invest in index fund you aim to maintain uniformity with Nifty or Sensex. You are not fighting to outperform it.

    How index funds work?

    Index funds are basket of stocks that have stocks in the same proportion as in Nifty. If Nifty goes up, your index fund will go up and if Nifty goes down your index fund will go down. It is as simple as that. Managing index funds are quite easy because you don’t need a research team that is working day and night to beat the index. You can make a basket of stocks in the same proportion as in Nifty and your work is done. These are passively managed funds.

    Who can invest in index fund?

    Different investors have different risk appetite. Some prefer high risk high reward stocks some prefer the opposite. Index fund is for people who don’t want much risk in the game. If you want predictable return with less risk, you can invest in index funds. However, if you want to beat the market, then you should go for actively managed funds.

    Things to consider as an investor

    1. Risk tolerance: You should first find out your risk appetite. If you are in your early years, you can definitely take more risk. However, if you are near your retirement you cannot afford to risk your hard earned money. If you want higher return you will have to take more risks, always remember that.

    2. Return factor: Index funds have very predictable return. They would be able to give you 10% to 12% return annually. If you are happy with that you can invest in index fund. However, most investor are not able to beat the market in the long run. If you want a hassle free investment option, index fund is for you.

    3. Cost of investment: Index funds have very less expense ratio, only 0.5%. You don’t need a dedicated team who would work hard to beat the market. Index funds are passively managed funds and this is the reason why they have very low cost of investment.

    4. Investment horizon: Index fund is for people who want to invest money for a very long term, say 10 to 15 years. In the long term it is very difficult to beat the market.

    To sum up

    Whether you want to invest in index fund or select stocks yourself, you will need a Demat account. 5paisa is one of the best brokers in the industry. You can open your Demat account with 5paisa and avail exclusive benefits.

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Lakisha Davis

      Lakisha Davis is a tech enthusiast with a passion for innovation and digital transformation. With her extensive knowledge in software development and a keen interest in emerging tech trends, Lakisha strives to make technology accessible and understandable to everyone.

      Follow Metapress on Google News
      The Rise of Mobile App Development in Houston: Talent, Innovation & Industry
      July 9, 2025
      ChatGPT and Gemini Helped Me Master a Language in 30 Days – Duolingo Never Got Me This Far
      July 9, 2025
      This ChatGPT Prompt Replaced My Assistant – And Made My Team More Productive
      July 9, 2025
      ChatGPT Didn’t Just Help Me Study – It Literally Passed the Exam for Me
      July 9, 2025
      Why It Pays to Have a Reliable Handyman in Los Angeles
      July 9, 2025
      AI-Powered Personalization: Tailoring Experiences in the Digital Age
      July 9, 2025
      Virtual Economies: The Rise of Digital Transactions and Their Societal Impact
      July 9, 2025
      Meth Addiction, Effects, and Treatment – Everything You Need to Know
      July 9, 2025
      Why Super Clones Are Worth It?
      July 9, 2025
      Compliance Made Easy: Top Homebase Alternatives for 2025 Labor Law Requirements
      July 9, 2025
      How to Understand Common Insurance Terms Easily?
      July 9, 2025
      What Makes Eddie Gravalese a Trusted Finance Consultant?
      July 9, 2025
      Metapress
      • Contact Us
      • About Us
      • Write For Us
      • Guest Post
      • Privacy Policy
      • Terms of Service
      © 2025 Metapress.

      Type above and press Enter to search. Press Esc to cancel.