Index funds are one of the most straightforward ways to invest

While investors regularly allocated a part of their income into the market, the COVID-19 pandemic in 2020 forced them to see that while it was fine to take risks when things were fine before the pandemic, the same wasn’t fine when everything shut down. At that time, a lot of investors felt the need for a stable income. As the need was felt, some started investing in index funds.

What are index funds?

They are a type of mutual fund that imitates the portfolio of an index. Index funds are also called index-tied or index-tracked mutual funds. They are passively managed as the main objective of index funds is to track and emulate the performance of a popular stock market index like S&P BSE Sensex and NSE Nifty 50. The asset allocation of an index fund would be the same as that of its underlying index. It is for …