n NISM Certifications
X NISM Series X
Medium

The primary advantage of Index Funds over actively managed funds is:

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Better returns due to alpha

  2. Lower costs

    Correct answer

  3. C

    More tax savings

  4. D

    All of the above

Why this is the answer

Index funds operate passively, tracking specific indices, resulting in lower management fees compared to actively managed funds.

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