Should I pay attention to fund ratings?
Ratings from independent sources is one of the most convenient ways to compare different mutual funds.
But they rely heavily on 3-5 years of past performance which is not a good indicator of future performance. In addition, independent ratings do not take into consideration the risk profile of
individual investors.
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Who manages Index Funds?
Just like actively managed mutual funds, index funds are also managed by fund managers. But fund managers have a little role to play, because constituents of index funds seldom change. Managers just buy and hold all the securities of a particular ...
Why should you invest in index funds?
Low Cost: Since index funds are passively managed, the total expense ratio (TER) is very less as compared to the actively managed ones. While an actively managed fund may charge you anything between 1-2% as TER, an index fund would typically charge ...
Who should invest in index funds?
Index funds are suited for passive investors, i.e. investors who are looking to build long-term wealth but: Don’t have time to manage their portfolio Want to stay away from constant monitoring and juggling their mutual fund portfolio. Are skeptical ...
What is an Index Fund?
An index fund is a type of mutual fund which constructs its portfolio by tracking the composition of a standard market index such as the Nifty 50 or the Sensex. The fund, not only invests in stocks which constitute the benchmark index, but also in ...
Can I lose money investing in index funds?
Like in all mutual funds – there is always risk of losing money in the short-run. An index losing 1% daily will lead to the index fund’s value falling by 1%. However, over the long-run index funds have delivered healthy returns.