Index Funds

Why Index fund-the reasons are best summarized by what John Bogle the founder of Vanguard and creator of the first Index Fund has said, "maximum diversification, minimal cost, and maximum tax efficiency, lower turnover (trading) and low turnover cost and no sales loads.

In developed markets Index funds are very popular and attract more investment than equity MFs. That's because most MFs there are not able to beat Index funds to justify the high costs. But what about in India. Already in large cap, MFs are finding it very difficult to beat the benchmark index especially over longer periods and on a rolling returns basis. However, in other categories many MF deliver significantly higher returns than their benchmark index.

Omega will recommend investment in Index Funds when there is still some money to be allocated to equity after investing in available opportunities in Direct Stocks and the select MFs.


Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323
Research Analyst - INH000000719

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