Cautious investors may shift to an index fund in mid-, small-cap categories

When selecting an index fund, pay attention to fee and tracking error

Sanjay Kumar Singh
Last Updated at October 20, 2021 00:33 IST

The new fund offer (NFO) of ICICI Prudential Smallcap Index Fund is on at present (it closes on October 26). In recent times, many index fund options have become available within the mid- and small-cap space from fund houses like Aditya Birla Sun Life, ICICI Prudential, Nippon India, Motilal Oswal, and so on. In the large-cap space, the consensus among financial planners has swung in favour of passive funds. In the case of mid- and small-cap funds, however, that is not so yet. So, what should your strategy be? Should you stick to active funds in this space, or is it time to make the switch to passive funds?

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