open dyslexic mode

You know how a regular index like the Nifty 50 works, right? They follow a market-cap-based strategy — the bigger the company, the more weight it gets in the index.

And an index fund simply copies a market index. If Reliance makes up 10% of the Nifty, then 10% of your index fund money goes into Reliance. Simple as that.

But smart beta funds are a bit more clever. They say, “Wait! Let’s also look at other things like value, quality, momentum, or low volatility.” They still follow rules like index funds, but instead of just copying the market cap weightings, they use different strategies (factors) to pick and weight stocks.

So, instead of blindly picking the biggest companies, Smart Beta Funds systematically pick companies based on a rule-based strategy.

They’re not actively managed by fund managers picking stocks on instinct. But they’re also not blindly passive.

Read more about how they work, the risk and benefits of investing, and should you invest in smart beta funds in our blog.

Link - wp.me/pe5xoh-1Gp

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