blogBy Investor Education Team
ETFs vs Index Funds: Which Is Right for You?
A comprehensive comparison of ETFs and Index Funds to help you choose the right passive investment vehicle for your portfolio.
Overview
Both ETFs and Index Funds are passive investment vehicles that track a market index. While they share similarities, there are important differences to consider.
ETFs
- Trade on stock exchanges like shares
- Real-time pricing
- Requires a demat account
- Generally lower expense ratios
Index Funds
- Purchased directly from the AMC
- NAV-based pricing (end of day)
- No demat account needed
- Can set up SIPs easily
Which to Choose?
If you prefer automated SIP investing, index funds are more convenient. If you want real-time trading flexibility and potentially lower costs, ETFs may be better.