What is Index Mutual Fund?

The index fund is actually a type of mutual fund, but there is a huge difference in the index mutual fund and other mutual funds, and the difference is that the Index Mutual Fund is a passive mutual fund, while other mutual fund active Managed Mutual Fund.

The Index Mutual Fund is a mechanical investment process at great extent, and in this Index Mutual Fund, the fund manager does not have to decide when to deposit the money in the Index Mutual Fund, in which stocks and how much investment should be done.

While in other mutual funds the manager needs research first and do analysis with the research team. And even after this, there is no surety that the decision will go right.

On the other hand, in the index mutual fund, the manager of this fund already knows that the money saved in the Index Mutual Fund is to invest in the shares of all the companies.

There are chances to get the benefit over the money invested in the Index Mutual Fund, according to the rate of interest on the index from a long time.

For example, if the index mutual fund is based in Sensex then the money deposited in the account will be invested on all the stocks which together creates Sensex.
Just like that, if the index mutual fund is based in Nifty then the money deposited in the account will be invested on all the stocks which together creates Nifty.