What are the three main factors when choosing an Index Fund?

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What are the three main factors when choosing an Index Fund?

Broadly, Tracking Error, Cost and size are three critical parameters while choosing Index Fund. The investment mandate of an equity index fund is to track its underlying equity index. Any deviation or error in such tracking is known as tracking error.

What are the important aspects to be considered while choosing an Index Fund?

While choosing an Index Fund, most critical aspects are cost (referred as TER), tracking error, tracking difference and size of the fund. UTI Nifty Index Fund is quite competitive in all these parameters.

What should I know before investing in index funds?

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Here are some important aspects that you must consider before investing in index funds in India:

  • Risks and Returns. Since index funds track a market index and are passively managed, they are less volatile than the actively managed equity funds.
  • Expense Ratio.
  • Invest according to your Investment Plan.
  • Tax.

Which factor is responsible for the growth of mutual fund?

One of the most important factors affecting mutual fund investments is the performance of a specific sector or industry that the fund is invested in. Certain policy changes implemented by the government can impact different sectors in different ways.

What are the factors that must be considered before making investments?

Explanations of Factors that Must Be Considered Before Making Investments 1 Return on Investment (ROI) 2 Risk 3 Investment Period / Investment Term 4 Liquidity 5 Taxation / Tax Implications 6 Inflation Rate 7 Volatility / Fluctuations on Investment Markets 8 Investment Planning Factors 9 Budget

Are all index funds created equal?

All index funds (and all passively managed funds) are not created equal. While the expense ratio is certainly an important consideration, it should not be the only one. The reason is that the fund sponsor can add value in ways that have nothing to do with “active” investing (defined as the use of individual stock selection and or market timing).

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What are the different types of investments?

Types of investments range from savings accounts and fixed-term deposits to property and shares on the stock market. People choose investments according to their personal needs, goals and interests. There are factors which need to be considered before making investment decisions.

What should I look for while making an investment in loans?

The loan is another factor which you should look for while making an investment. Two factor you need to see first is wheatear you will be able to get the loan on investment or not. The second factor is how much loan you actually owe. If you have already taken loan it is good idea to prepay loan before investing.