An index fund is a mutual fund that copies a market index, holding the same securities in the same proportions, instead of picking them.
An index fund follows a set list. It holds the shares or bonds in an index, such as the Nifty 50, a mid-cap index or a government bond index, in the same weights, and changes its holdings only when the index changes.
Because no one is choosing stocks, index funds usually charge lower expense ratios than actively managed funds, and their portfolio turnover is low.
The fund's return is the index's return, less expenses and small differences from cash held and the timing of trades. Two figures measure how close it comes:
An index fund is bought and sold with the fund house at the day's NAV like any other fund, with SIPs. An ETF tracking the same index trades on the stock exchange instead and needs a demat account.
Each index fund names the index it tracks as its benchmark, in its total return form.
Each fund page has its returns, risk, costs, managers and everything it holds.