For example, they buy the same stocks and in the same proportion present on Nifty/Sensex.
Since these funds imitate indices, the role of fund manager is limited. So, the expense ratio is lower than active funds.
However, funds can’t always match the movements of an index, causing tracking error. So, a fund with minimum tracking error is ideal.
Conservative equity investors who want to stick with large caps can consider investing in large-cap index funds. Many index funds have beaten active large-cap funds over long-term
Most fintech platforms offer index funds. The minimum investment amount is Rs 500!