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What are Index Funds ?

Index Funds are generally invested in the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc These schemes invest in the securities in the same weightage comprising of an index.

NAVs of such schemes would rise or fall in accordance with the rise or fall in the index which is also known as “tracking error” in technical terms.

Necessary disclosures in this regard are made in the offer document of the mutual fund scheme.Normally exchange traded index funds are also Mutual fund which are traded on stock exchanges.

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