Index Funds:

  These are funds that simply invest in the underlying index – in the same proportion of stocks as the index.
  Since revision of index composition is an ongoing process, all that the fund manager needs to do is simply readjust the portfolio to ‘mirror’ the index.
  All index funds are passively managed with minimal expense ratio, since there is little / no research involvement – saving huge cost to the Fund House.
  Index funds are preferred in developed markets like US / Europe / Japan.
  But in developing markets like India, actively managed funds outperform the index by sizable margin.