When ace investor Warren Buffett talked about them, he used the term “low-cost" when he mentioned index funds. View Full Image Paras Jain/MintTracking error: The difference in the performance of an index fund and the underlying index is tracking error. Suppose the Nifty 50 index gained 5% last month and an index fund tracking it gave 4.5% returns. As index funds mimic the underlying index, investors may not need to wait and look at their track record. According to Dhawan, if the NFO is a me-too fund—for which investors have comparable schemes—it’s better to stick to index funds with a track record.

Source: Mint July 07, 2021 20:03 UTC