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How to Invest in Index Funds in India

Index funds have become the most popular mutual funds these days. Index funds offer good returns with low risks and predictable returns hence, they have become very popular.

An index fund is a mutual fund that is tied to the market index. An index fund is basically a passive mutual fund. This means it will move in tandem with its underlying benchmark.

Thus, Indian index funds will mirror the movement of S&P BSE Sensex and NSE Nifty 50.

Investing in index funds in India results in automatic diversification, which reduces your overall risk.

There is also no market timing or individual stock picking involved. The fund simply tracks the performance of the index.

Index funds are managed passively. Hence, they have a lower expense ratio as compared to actively managed mutual funds. At Equitymaster, you can find the Top 5 index funds with the lowest expense ratios.

It is very easy to invest in index funds in India. Just follow these simple steps:

  • Sign up for a mutual fund account with any broker.
  • Complete your KYC formalities.
  • Choose your fund, make the payment

And the investment is done...Voila!

Investing in index funds in India is simple, easy, and rewarding.

Warren Buffett, the world's most famous investor, has frequently touted the benefits of investing in low-cost index funds.

In fact, he's instructed the trustee of his estate to invest in index funds.

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