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Q. Are index funds better than Mutual Funds? Specifically for India. Any views?


Read somewhere recently that in US 48% of total investments in MFs are in index funds.
Views welcome. TIA. @tipupahan @alpha @ygtrader
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10 Replies
ElliottWave Master @ygtrader
Sep 10 11:07 PM

Well it depends on the specific index
Dhruv @DhruvMan
Sep 10 11:09 PM

@ygtrader Can you please elaborate? You mean whether its is tied to Nifty or S&P ?
ElliottWave Master @ygtrader
Sep 10 11:11 PM

We'll both mutual funds and index funds aims to diversify your portfolio but,
There are index which are used to track only a specific sector,
So that's why I've said it depends on index (it can be specific or diversified)
Dhruv @DhruvMan
Sep 10 11:22 PM

@ygtrader Alright. Understood what you are saying.
Dhruv @DhruvMan
Sep 10 11:22 PM

What will be some index funds that you might want to consider? Something tracking Nifty next 50? I was going through the list of Index funds listed on Nse site. Nothing particularly looks exciting to me.
Dhruv @DhruvMan
Sep 10 11:23 PM

Wonder if the MF industry is sufficiently inclined to create good index fund products. It will undercut what they do.
ElliottWave Master @ygtrader
Sep 10 11:29 PM

Well if diversify is your goal then I suggest nifty500.
But for me I won ETFs of every index available so I don't need to be bothered about diversity, lol
Alpha @alpha
Sep 11 6:05 PM

There is no straight yes or no answer to this. One needs to understand what his purpose of investing is. If you take my example I am an option writer too. Where I have bought index funds and pledged them to write options. Now if I even get monthly 1.5% from options writing I am more than happy. On the other hand, historically Nift index funds have given 16% CAGR from inception. And recent 10 years have been 12% if I am not wrong.
Alpha @alpha
Sep 11 6:06 PM

On the other hand, there are investors who want more aggressive return and for which they are ready to pay the mutual fund guys charges ranging from 1%-4% or even higher. Where on the Index fund the charges are .01%
Dhruv @DhruvMan
Sep 11 7:17 PM

@alpha Got it sir. Thanks for answering in such detail. Clearly its what purpose you have and how knowledgable are you to fit that into a strategy. I aint so good with options so I can't do it. But I get your point.
Wonder which broker allows pledging of mutual funds? I have a zerodha account, and they dont allow.
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