An index fund is a mutual fund or ETF that replicates a market index—such as Nifty 50, Sensex, or Nifty Next 50—rather than trying to beat it. Because there is no active stock-picking, fees are low (0.1–0.5% vs 1–2% for active funds).

Why FIRE Investors Use Them

• Low cost — More of your money stays invested
• Diversification — One fund holds dozens or hundreds of stocks
• Predictable — You get market returns, minus fees
• Tax-efficient — Lower turnover than active funds

India Options

• Nifty 50 Index Fund — UTI, ICICI, HDFC, SBI
• Sensex Index Fund — Similar large-cap exposure
• Nifty Next 50 — Mid-cap tilt
• International — US S&P 500 or global index funds (via international funds)