This paper is an empirical analysis of Index ETFs and Index Funds and aims to evaluate the performance of these two instruments on the basis of the following parameters –Data Envelopment Analysis (DEA), Sharpe Ratio, Active returns and Tracking Error. The examination reveals that ETFs outperformed Index Funds on all parameters during the study period except in case of tracking error. Wilcoxon Signed Rank test has also been conducted to analyse the head-to-head performance of ETFs and Index

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... , here also the ETFs produce significantly superior returns. Qualitative differences between these two classes of instrument reveal that Index funds are more suited to small retail investors while ETFs are found to be better for institutional and large investors.