POSTED BY February 18, 2011 12:32 pm COMMENTS (5)ON
I want to know how does returns from a Index fund is calculated. I have a ULIP which invests 100% in index fund over a period of 20 years. Today nifty is 5500+ and in next 10 years it might reach to 10000+ or more but at the end of my policy term i.e after 20 years it is possible that it again comes back to 8000 or even less than 5000. In such a scenario will I be in a loss as it might be possible that I might not get any return at all or even negative return.
I don’t know how index fund functions, can anybody tell me if my hypothesis is correct?