Why should you not invest in index funds?
Index funds are built to replicate the index and most active fund managers charge fees to
outperform indexes. Therefore, an investor who is purely looking to do better than the index should
not invest in index funds. It’s important to point out that very few funds end up doing better than the
index in the long-run.
Related Articles
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 ...
Why are index funds popular in other parts of the world?
Index funds are considered as ideal for constructing a core portfolio for long term wealth creation due to their diversification benefits, low cost and low portfolio churn. Globally, Index funds are popular due to the following reasons – Easy - Index ...
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 ...
Are all index funds the same?
All index funds are not same because different index funds track different indices. But the philosophy behind investing remains the same. There are different types of indices in India: Benchmark indices like BSE Sensex and NSE Nifty Sectoral indices ...