I have been reading 'The simple path to wealth' by Jim Collins which advances the indexing philosophy to investment.

The issue is that the book is written from the perspective of a US citizen, and hence recommends a broad stock market fund offered by Vanguard that exposes investors to the US stock market.

I am an Indian citizen, and would like to be exposed to the Indian stock market. My elementary searches reveal a lack of analogous funds in India. This begs the original question: Is there a total stock market index fund in India, like the one offered by Vanguard in the US?

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    It's not dependent on citizenship though. You would want to pick the market which best meets your risks and gains target, not necessarily one of the country you are a citizen of. Better yet, multiple markets to diversify. – void_ptr Jun 16 '19 at 12:59
  • Fair point. The thing is, I am just starting out with my investments (I am a 20 year old). And even though I have had an education in commerce - for the time being - international markets seem outside my circle of competence. So the plan is to start with the familiar (ie, home country) and venture out with experience. – Dhruv Gupta Jun 17 '19 at 5:03
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    @void_ptr But effective risks and gains do depend on citizenship, to the extent that one's future expenses are in a specific currency, and investing in foreign markets creates an additional currency risk in funding those expenses (while currency hedging has its own costs). Granted, the benefits of global diversification are real and investors often exhibit "home country bias" beyond what is justified. – nanoman Jun 17 '19 at 7:00
  • Excellent point. The fact that currency fluctuation risk didn't strike me immediately tells me I have a lot to learn! Thank you for the comment. – Dhruv Gupta Jun 17 '19 at 7:41
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    Most countries have their own ETF (Exchange-traded funds) set up by various brokers. Nevertheless, you must be careful since not all ETFs are the same. Some ETF may actively trade and waste the fund money. So read the perspective before jump into the bandwagon. en.wikipedia.org/wiki/Exchange-traded_fund – mootmoot Jun 17 '19 at 12:38

There are two primary indices in India, the NIFTY 50 and SENSEX (30).

There are many funds that invest in either of these indexes. While these may not be representative of the entire stock market, they would represent a significant percentage. Most total stock market funds are capitalization weighted, so proportionately invest more in the larger market cap companies.

The problem with investing in broader less popular indices is that they may be less liquid and their constituents may be less liquid, resulting in higher transaction costs that will reduce gains.

An important factor also when choosing funds is the expense ratio. Higher expense ratios can make a significant difference over years of holding the positions.

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    As you mentioned, NIFTY and SENSEX are not total stock market indices. In NIFTY, the top 10 companies get slightly more than 60% of the weight; this is opposed to VTSAX (a total stock market fund offered by Vanguard) where the top 10 companies only get about 18% of the share. That's a significant difference, one that prevents me from accepting your answer. The points about liquidity and expense ratio are amazing. Thanks for taking out the time to write the answer! – Dhruv Gupta Jun 17 '19 at 5:31

I'm a fan of Jhon Bogle and his follower JL Collins and their investment philosophy and most importantly, investor of VTSAX fund. To answer your question, I feel Nifty 500 Index Fund comes very close to VTSAX. It's offered by Motilal Oswal.

Also, let me know if you found anything better than this.

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  • No, I haven't found anything. – Dhruv Gupta Mar 10 at 14:24

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