Confused between index funds and Exchange Traded Funds? Let’s break it down!
Both follow an index, like the Nifty 50 or BSE Sensex, and aim to give similar returns.
But they differ in how you buy and sell them.
Index funds are bought at their day-end Net Asset Value, like regular mutual funds. ETFs trade on the stock market in real time, like stocks.
Index funds can be bought from mutual fund companies. ETFs need to be bought through a demat account.
If you prefer ease, an index fund may be suitable. If you like flexibility and real-time trading, ETFs may suit you.