New Delhi, Feb. 28 -- The volatility and risk in the equities market are known to all, which often prevents people from investing in stocks. However, there is a way to invest in the equities market without the stress of selecting individual stocks and depending on market gains or losses. This simpler way of investing in the equities market can be done through passive funds.

Passive funds mimic the performance of a specific market index. It is appropriate for investors looking for cost-effective and less risky exposure to the market. As the name suggests, passive funds are passively managed and designed to mirror the performance of a market index such as the S&P BSE 500 or Nifty 50.

Passive investing involves selecting a market index and...