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  • Writer's pictureAnkur Kapur

Index mutual fund/ETFs vs active mutual fund

Both funds fund and actively managed mutual funds allow investors to invest in n variety of assets.

Index mutual fund/ETFs vs active mutual fund
Index Fund is a portfolio of stocks or bonds that are designed to mimic the performance of an index. It is a sort of investment that tracks a market index.

An Index fund is best for someone who doesn’t have lots of money and just starting to invest. This probably would allow them to achieve diversity in their investment without spending hours learning how to invest.

Index funds have lower fees as compared to mutual funds. It allows you to diversify across many companies and sectors.

An active mutual Fund is a fund that invests in a variety of assets, which includes stocks, bonds, and short-term debt. It is a professionally managed investment fund that pools money from different investors to purchase securities.

Mutual funds are just like index funds, invest in a variety of assets, stocks, bonds, etc but they are trying to beat the market. Since they employ a fund manager and research team, the cost is higher than an index fund.

Irrespective, index funds or actively managed mutual funds may be chosen by an investor. Usually, themes and large-cap index funds are more popular.


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