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Index Fund
An index fund holds the same stocks as an index, in the same proportions, rather than picking stocks. Because it needs no expensive research, it charges low fees, and its returns closely track the index.
Why It Matters
Most actively managed funds fail to beat their index over long periods, which is the case for index funds.
In India
A Nifty 50 index fund rises and falls almost exactly in line with the Nifty, minus a small fee.
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