{"id":3790,"date":"2021-08-06T19:23:10","date_gmt":"2021-08-06T13:53:10","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=3790"},"modified":"2022-05-24T14:59:31","modified_gmt":"2022-05-24T09:29:31","slug":"etf-vs-index-fund","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/etf-vs-index-fund\/","title":{"rendered":"ETF vs Index Fund \u2013 Overview, Features, Differences and Where To Invest"},"content":{"rendered":"\n

Passive investments have been gaining traction in India over the past few years. In passive investing, the investors\u2019 choice is simplified by offering a portfolio of shares or assets that are part of a market index<\/a>, mirroring it, thereby, capturing the entire market or a market segment through such investments. <\/p>\n\n\n\n

Index funds<\/a> and Exchange Traded Funds<\/a> (ETFs) are the most popular ways to invest<\/a> passively in the equity<\/a> market. Although both are easily confused and the terms interchangeably used because they both consist of a portfolio of shares that tracks a market index, the difference between ETF<\/a> and index fund<\/a> is in their mode of operation. Let\u2019s take a detailed look at index funds<\/a> vs ETFs to assess which may work for you.<\/p>\n\n\n\n

One of the most significant difference between ETF and Index Fund is in terms of where and how they are transacted. index funds are sold at the end of the day like other mutual funds<\/a>, while ETFs are traded on the stock exchange like shares. Although index funds have lower expense ratios than actively managed mutual funds, it is still higher than that of ETFs. <\/p>\n\n\n\n

On the surface, an ETF would appear to be a more efficient instrument in terms of cost and liquidity, however, the market functions complicate the potential for ETFs that are less diversified than index funds. <\/p>\n\n\n\n

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