{"id":5541,"date":"2022-07-27T20:45:57","date_gmt":"2022-07-27T20:45:57","guid":{"rendered":"https:\/\/blog.researchandranking.com\/?p=5541"},"modified":"2024-11-16T16:13:39","modified_gmt":"2024-11-16T10:43:39","slug":"index-funds-in-india","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/index-funds-in-india\/","title":{"rendered":"Know The Top 4 Benefits Of Index Funds in India Today"},"content":{"rendered":"
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Did you know that index funds account for almost 16 percent of the US stock market<\/a> capitalization at the end of 2021, higher than actively managed funds, whose share is 14%?<\/em><\/strong> <\/p>\n\n\n\n

Invest in Index funds in India – A decade ago, actively managed funds were ruling the roost. At the beginning of 2010, actively managed funds managed assets worth $2.25 trillion, compared to just $0.77 trillion in index funds. And the story in India is also not entirely different. Since Feb 2020, the asset under management (AUM) index funds in India has increased by over 590%, while the number of index funds more than doubled to 72.<\/p>\n\n\n\n

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What is Index Fund<\/a><\/div>\n<\/div>\n\n\n\n

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So, why are Index Funds in India becoming popular over other equity funds<\/a>, and what are they? Let’s understand.<\/strong><\/p>\n\n\n\n

<\/a>What are Index Funds?<\/strong><\/h2>\n\n\n\n

Index funds are a type of mutual funds<\/a> or exchange-traded funds that invest in the stocks of a particular stock market index<\/a>. Their stock portfolio mimics the composition and weightage of the stocks in that index. For example, Reliance Industries and HDFC Bank have a weightage of 12.94% and 8.55%, respectively, in the Nifty50<\/a> index. Therefore, any index fund that tracks the Nifty50 index will have to have stocks of Reliance Industries and HDFC Bank in that proportion only.<\/p>\n\n\n\n

Index funds in India are not new in the market. John C Bogle, the founder of Vanguard, launched the first index fund in the world on 31st August 1976. Called the First Index Investment, it tracked the S&P500 index. Over the decades, index-based investing has become popular and attracted plenty of new and existing investors in the market.<\/p>\n\n\n\n

<\/a>What Makes Index Funds So Unique and Popular?<\/strong><\/p>\n\n\n\n

Simplicity is what makes index funds and index-based investing so unique and popular.<\/strong><\/p>\n\n\n\n

For instance, index-based investing is known for its passive investing style, meaning the fund manager<\/a> or user doesn’t have to actively manage the fund. Instead, the fund manager must invest in stocks included in the index. It involves no other additional tasks like monitoring the performance of funds or researching new stocks.<\/p>\n\n\n\n

Benefits of Index Funds in India<\/h3>\n\n\n\n

Moreover, investing in an index fund<\/a> or index-based investing also fulfils other basic principles of investing, like<\/p>\n\n\n\n