'Nifty Index Fund Minimises Impact Costs'

What's an index fund?

An index fund is a mutual fund which merely invests in the securities in the index. It is passive, in the sense that absolutely no effort is made to produce results better than the index.

Why would that be optimal? Isn't it the job of the manager to try to outperform?

The reality of mutual fund perform ance is that most fund managers don't consistently outperform the index. In that case, it seems like a waste to pay their costs, and to incur the additional fluctuations in NAV that are introduced by their efforts. The index fund serenely moves along, it's NAV locked to the level of the index.

 

For a long time, the motto of many fund managers was 'Don't just sit there, do something.