What if you want to hold a mutual fund portfolio that is able to generate returns almost in line with the stock market? Welcome to the world of passive funds! Investing in index funds is the solution as they are passive funds with underlying stocks as represented in the index that it tracks. It means, by investing in an index fund, you end up holding stocks in the same proportion as held in the index.
By investing in index funds, you essentially stay away from the funds that are managed by a fund manager. The role of a fund manager in selecting the stock or an industry and even the allocation across them is totally absent in index funds.
The returns of an index fund mirrors the returns generated by the index that the fund tracks. In a way,
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