ETFs and index mutual funds. Which one is a better choice? SECTIONS Last Updated: Jun 01, 2021, 09:02 AM IST Share Synopsis As with everything in life, there are some things that you actively participate in and some others where you are passive. iStock As with everything in life, there are some things that you actively participate in and some others where you are passive. Active participation is when you are directly engaged and involved in the outcome. Passive participation is just the opposite, wherein you observe the proceedings without directly influencing the activities or their outcome. When it comes to investing, the same principle applies. You can actively invest in specific stocks and create a portfolio or you can just invest in a basket of stocks selected by someone else using pre-determined rules. Some of the foremost amongst such investments, are ETFs and Index Funds. Both these asset classes originate from the same family of passive funds, which mirror the Index that they follow. They both aim to track the performance of the underlying Index as closely as possible.