What are Index Funds

These are mutual funds that track one of the market indexes like Sensex or Nifty. The fund manager, here, does not get to select the stocks the fund will invest in. The fund portfolio will mirror the index that it tracks as accurately as possible. 

Sensex is an index derived from 30 most actively traded stocks on the Bombay Stock Exchange (BSE). Similarly Nifty is the benchmark index of the 50 most actively traded stocks on the National Stock Exchange (NSE). Now the fund “HDFC Index Fund-S&P BSE Sensex” tracks Sensex where as “HDFC Index Fund-NIFTY 50 Plan” tracks the Nifty 50. 

Get more details from Jama Wealth Blog