Index Funds

Index Funds are low-cost Mutual Funds, which maintain a very low tracking error against a Benchmark Index. The range of Indexes is infinite, Market, Market Cap, Sector. No investment decisions are made.

Index Funds covers both Index Mutual Funds and ETFs. They are collective investment schemes. Index Funds aim to have a negligible Tracking Error to a stated Benchmark Index. The objective of an Index Fund is for an investor to gain exposure to a specific grouping of Stocks, by Market Cap, Sector, Economic Region or a Country. No investment decisions are made, no matter the market conditions. Index Funds offer diversification by holding all the Stocks in the Index. The ability to trade is the difference between an Index Mutual Fund and ETFs. ETFs are traded on a Stock Exchange, acting like a basket of Stocks. Trading in the units is often Intraday. Index Mutual Funds offer a tradable NAV, possibly daily or at least weekly. The Units are traded through the Fund Administrator via a subscription redemption process.