What are Index Funds?

Modified on Wed, 04 Oct 2023 at 03:47 PM

Index funds represent a category of mutual funds designed to track the performance of a designated market index, such as the Nifty50, Nifty IT, or Bank Nifty Index. Their primary purpose is to offer investors comprehensive access to a specific segment of the financial market, rather than portfolios actively managed by fund managers.

The performance of an index fund slightly varies from the respective index/benchmark which is measured as tracking error.

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