You Should Invest In Index Funds Because…

Are you constantly in the current market Given the volatility and the accompanying bullish trend, which stocks do not make sense to buy? Or the number of stocks in your portfolio has increased. So you don’t even know what to buy at a high price and how much to buy, how far to buy, then another option. Mutual fund index funds look better.

Thus this fund is called passive fund, because in it the fund manager does not have to be active, do not have to think long and hard, he is in the index. The stocks, which are in percentage, just have to follow it.  Seeing Harshad Mehta’s ever-increasing index, people often joked that Let’s buy the index only. This joke has long been a fact. There are a large number of investors in the index today. Along with this, exchange traded funds (ETFs) are also booming. The cost of both these products or schemes is also lower overall.

Recommendation Of Financial Planner

This product is also considered good for investors who are starting to invest in mutual funds. Recently, various mutual funds have been offering such schemes. Financial planners also recommend index funds and ETFs. However, the same type of ETF or Index Fund (name with different names) should not be chosen more than once. Because their investment funds are the same. Among the most recent index funds on the market is the NSE benchmark index Nifty-based Motilal Oswal Nifty Index Fund, which currently manages Rs 50 crore. Its top stocks are HDFC Twins, ICICI Bank, Reliance and Infosys.

This Nifty based fund invests in fifty stocks of Nifty, so that investors get the best fifty stocks together and also get diversification due to it. While DSP Nifty offers Next 20 funds, which currently have a management of Rs 113 crore. There are fifty other stocks in this Next 20 index which are not exactly copies of Nifty stocks. The fund also offers diversification. The top five stocks of the fund include Adani Enterprise, Infoage, Apollo Hospital, Avenue Supermarket and Adani Green Energy.

Opportunity Also In Midcap Stocks

Do you want to invest in midcap stocks under index funds? The number of stocks in Nippon India Midcap 150 Index Fund is as long as 120, which offers more diversification and midcap stocks as new stocks. So that one more aspect of the market is covered. The form of diversification is more concrete and comprehensive as no more than 5% of the money is invested in a single stock. The top five stocks include Adani Total Gas, Lorus Labs, Shriram Transport, Crompton Greaves and Voltas. This fund is ideal for investors who want exposure to midcap stocks Is counted. The fund currently manages a fund of Rs 15 crore.

Opportunity In Foreign Tech Companies

Motilal Oswal also offers a fund in the name of Nasdaq-100. This provides an opportunity to invest in technology companies. These stocks are listed on the US exchange Nasdaq. This is in the form of a fund of funds. This is because the fund basically invests in a fund that invests in companies listed on the US Nasdaq, hence it is called a fund of funds. The top five stocks include Apple, Microsoft,, Facebook and Alphabet C-Class. This fund is suitable for investors who want to diversify their investments in foreign global companies and have the ability to take more risks. These stocks are available in the Indian market Not so a different opportunity for investors. However, everything that is invested or maximum investment in tech stocks has to be considered to some extent risky.


Question: What is the difference between an index fund and an ETF?

Ans: Index funds are not listed, as they are similar to mutual funds in that investment-buying and redemption are done with mutual funds only. When an ETF is listed on an exchange, which is why it is called an exchange traded fund, it can be traded on the stock market like stocks.

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