Low-cost passive investing strategy tracking market indices like Nifty 50
Index funds track a market index like Nifty 50 without active stock selection
Single investment provides exposure to 50-500 companies across sectors
Expense ratios of 0.1-0.5% compared to 1-2% for actively managed funds
Holdings are publicly known as they mirror the underlying index composition
Over 80% of active fund managers fail to beat index returns over 15 years
Save 1-1.5% annually in fees, which compounds to significant wealth over decades
Eliminates the risk of choosing wrong individual stocks or timing the market
Lower portfolio turnover results in fewer taxable capital gains events
You get exactly what the market delivers, minus minimal fees
Set-it-and-forget-it investing without constant monitoring or rebalancing
Top 50 large-cap companies, representing ~65% of Indian market capitalization
BSE's benchmark index of 30 well-established companies across key sectors
Next 50 large-cap companies after Nifty 50, offering mid-large cap exposure
Broad market index covering large, mid, and small-cap stocks comprehensively
Sectoral index focused on banking and financial services companies
Technology sector index tracking major IT services and software companies
Index Funds
Passive - tracks index automatically
Active Funds
Active - fund manager picks stocks
Index Funds
0.1% - 0.5% per year
Active Funds
1% - 2.5% per year
Index Funds
Matches market returns consistently
Active Funds
Aims to beat market, often fails
Index Funds
Market risk only, diversified
Active Funds
Market + manager selection risk
Index Funds
Long-term investors (10+ years)
Active Funds
Investors seeking alpha (rare)
Most reliable index for beginners; broad diversification across blue-chip stocks
Systematic Investment Plans average out market volatility through rupee-cost averaging
Index funds shine over 10+ years; short-term market swings don't matter
Don't exit during corrections; markets always recover and reach new highs
If you hold multiple indices, rebalance once a year to maintain target allocation
Choose funds with lowest tracking error and expense ratio for best results