Generally, it’s Rs 100 or Rs 500.ĭepends on the ETF. Similarities & Differences Between Index Funds And ETFsĪn index or a modified version of an indexĭepends on the fund.

The table below highlights the key differences between the two. So, mainly, we will talk about the difference between index funds and ETFs. You can invest in both, as you would invest in any mutual fund. However, from the perspective of how you invest, FoFs and index funds are similar. There could even be multiple underlying funds of an FoF. An FoF puts money in another fund, which could be both active or passive. Other emerging options are funds of funds or FoFs. Differences Between ETFs and Index FundsĮTFs and index funds are the two main avenues of passive investing. So even if you know the nuances of investing in ETFs and index funds, the in-depth analysis in this article will still give you some useful insights.Īlright, let’s start with a quick recap of the differences between ETFs and index funds. We will discuss key parameters you can use to evaluate ETFs and index funds, and also evaluate some of the most popular ones to see what comes out on top. That’s exactly we will cover in this article. However, when it comes to passive investing there are two options available to investors – ETFs and Index Funds.īut, is one better than the other? If yes, then which one?

% of active small-cap funds underperforming the Nifty Smallcap 250 % of active mid-cap funds underperforming the Nifty Midcap 150 % of active large-cap funds underperforming the Nifty 100 Most Active Funds Fail To Beat Their Benchmarks So, underperformance by active funds possibly significantly boosted passive funds. And even though just 13% of small-cap funds didn’t beat the benchmark in 2022, this number was quite high in the preceding two years. For mid-caps % of funds underperforming was 55%. Now, there are many reasons responsible for the rise of the passives, including their low cost, low maintenance, and wider suitability, but one reason that stands out is their active counterparts’ underperformance.Ī look at the percentage of funds underperforming the Nifty 100, Nifty Midcap 150, and Nifty Smallcap 250 indices will give you an idea.Īs you can see, in 2022, nearly 67% of active large-cap funds underperformed the Nifty 100. By 2022-end, they grew to 6.36 lakh crore, a jump of over 400% in just 5 years. It shows the assets of passive funds – ETFs, index funds, and funds of funds or FoFs.Īt the end of 2018, the assets of passive funds stood at Rs 1.22 lakh crore.

It’s no news that the popularity of passive investing is on the rise.

Index fund