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What is the importance of index fund?

Updated: 9/20/2023
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Index funds offer the investor a low-cost, transparent and near market matching performance (less expenses). They are often used as a means of diversification giving the average investor access to a segment of the market without the risk or costs from actively managed mutual funds. Many investors use a similarily invested index fund to compare the performance of actively managed funds. An example of this would be to compare an S&P 500 index fund, invested in the laregst companies in the market against a large-cap mutual fund that is actively managed.

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What is the symbol for First Trust BICK Index Fund in NASDAQ?

The symbol for First Trust BICK Index Fund in NASDAQ is: BICK.


What are index fund in mutual fund?

Index funds are type of mutual funds that are intended to track the returns of the market's index.Index is a group of securities that represents particular segment of market.Rleiance mutual fund has recently launched Reliance index fund whose securities are covered in Nifty and sensex


What is an index fund?

An index fund is one that mirrors the performance of the underlying index. For example if there is an index fund based on the BSE Sensex, the investments done by the fund manager would be in exactly the same ratio as the % weightage of stocks in the BSE Sensex. He would invest in only those 30 stocks and stay away from other stocks. Hence the performance of the fund would be an exact replica of how the BSE performs.


What are some equity index funds in India?

These are Mutual Funds that invest in Stocks that comprise the Index they are tagged to and buy those stocks in the exact ratio that their weightage is in the respective index. For example, a Sensex Index fund will buy the 30 stocks that comprise the BSE Sensex in the exact ratio that these 30 stocks are given weightage by the Sensex.Note: Since the BSE(Sensex) and NSE(Nifty) are the two prominent exchanges in India, most Equity Index funds tag themselves to either of these two indices.Example:a. HDFC Index Fund - Sensexb. Reliance Index Fund - Sensexc. IDFC Nifty Fundd. HDFC Index Fund - Niftye. ICICI Prudential Index Fund - Niftyf. Reliance Index Fund - Niftyg. etc


Is an index fund a good investment?

An index fund can be a great investment. If you read the works of John Bogle (who founded the Vanguard Group), he argues that an index fund has the best possible potential of maximizing your return with little risk and, more importantly, costing you the lowest amount in fees. The more you pay in fees, of course, the lower your return. A good index fund like an S&P 500 index fund or a total market fund performs well over time and won't cost you much.

Related questions

What purpose does an index fund provide?

Index fund is a investment scheme that provides the movement of a specific financial market. You can track your index by paying a certain fee. Index fund is available in TSX.


What should I know about money before investing in an index fund?

An index fund tries to replicate a "market index", that is, the aggregate movements of a segment of the market. The most important thing to know about an index fund is that the fund will attempt to mirror the index, EVEN IF the index is moving downward, losing you money. You should always be arare of any potential risk to loose your investment. Investing in an index fund is a relativley safe investment,but there is always risk.


What is the purpose of the mutual fund index?

The Mutual Fund Index is designed to track the performance of a bond or stock index to predict the future behavior of said index based on its past performances.


How do I know if an index fund is right for me?

Just to keep it basic, you will know that an index fund is right for you by simply looking at your stocks. Do you have a lot of money/assets in stock market? If so then an index fund should help you.


What are the advantages of investing in an Index Fund?

There are many advantages of investing in an Index Fund. An index fund allows you to enjoy the good parts of a mutual fund, with little or none of the bad, by buying stock in all the companies of a particular index and thereby reproducing the performance of an entire section of the market. An index fund builds its portfolio by simply buying all the stocks in a particular index.Investing in stock index funds is often called passive investing. The management fees of an index fund tend to be lower as less money is spent on researching stocks.


What is the symbol for iShares MSCI ACWI Index Fund in NASDAQ?

The symbol for iShares MSCI ACWI Index Fund in NASDAQ is: ACWI.


What is the symbol for iShares NASDAQ Biotechnology Index Fund in NASDAQ?

The symbol for iShares NASDAQ Biotechnology Index Fund in NASDAQ is: IBB.


What is the symbol for First Trust BICK Index Fund in NASDAQ?

The symbol for First Trust BICK Index Fund in NASDAQ is: BICK.


What is the definition of index funds?

An index fund or index tracker is a collective investment scheme (usually a mutual fund or exchange-traded fund) that aims to replicate the movements of an index of a specific financial market, or a set of rules of ownership that are held constant, regardless of market conditions.


What are index fund in mutual fund?

Index funds are type of mutual funds that are intended to track the returns of the market's index.Index is a group of securities that represents particular segment of market.Rleiance mutual fund has recently launched Reliance index fund whose securities are covered in Nifty and sensex


The fund house that first launched an index fund in India?

BNP Paribas


What is an index fund?

An index fund is one that mirrors the performance of the underlying index. For example if there is an index fund based on the BSE Sensex, the investments done by the fund manager would be in exactly the same ratio as the % weightage of stocks in the BSE Sensex. He would invest in only those 30 stocks and stay away from other stocks. Hence the performance of the fund would be an exact replica of how the BSE performs.