Investing & funds
What is Index fund and ETF?
Also called: ETF, Exchange traded fund, Passive fund
Hinglish mein padhein: Index fund aur ETF kya hote hain?
Index funds and ETFs simply copy an index like the Nifty 50 instead of picking stocks. ETFs trade on the exchange like shares.
Passive funds have low expense ratios and remove the risk of a fund manager underperforming the index.
Tracking error measures how closely the fund follows its index.
Related terms
- Nifty 50The Nifty 50 is NSE's flagship index of 50 large companies across sectors, weighted by free-float market capitalisation.
- Mutual fundA mutual fund pools money from many investors and invests it in stocks, bonds or both, managed by a SEBI-registered asset management company.
- Expense ratioThe expense ratio is the yearly fee a mutual fund charges, expressed as a percentage of your investment and deducted from the NAV.