This type of Mutual Fund invests in shares of companies or other assets that make up that particular index in the same percentage as they form part of that index. Eg BSE Sensex, Bank Nifty, Gold etc. Since no research is required by the fund manager to decide on the investment, the cost of managing index funds is low. So they have a low Total Expense Ratio (TER) that all mutual funds charge, improving the chances of a higher return.
Index Fund
