Index fund or ETFs? Compare total cost

The difference between market price and the NAV imposes an additional cost. Besides, there is brokerage fee, which amplifies an ETF's tracking error

The financial landscape in India is witnessing a notable shift with passive investing emerging as a favoured choice. At present, approximately Rs. 7.5 lakh crore, almost 25 per cent of the total equity and hybrid-equity asset under management (totalling about Rs. 31 lakh crore), is invested in these funds.
 

At its core, passive investing is a method where investors buy a bundle of stocks in the same proportion as in the chosen index. Take the example of the Nifty50 index, comprising India’s 50 leading companies represented in proportion to their market weight. Its movement mirrors that of its constituent stocks.