Index mutual funds are a type of fund which invests in stock market indexes such as NSE Nifty, BSE, Sensex etc. The fund manager invests in the same security at present in the same proportion and it does not change composition at the later. Index fund includes equity funds and equity-related instrument along with bonds.
Benefits: Index mutual funds have lower expenses rate as compared to the others mutual funds and it has diversified nature and reduce the risk associated with the portfolio. It is easier to manage and suitable for well-organized market.