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Index Funds

An index fund is a fund that follows a passive investing strategy, meaning that the fund managers attempt to match an identified benchmark index, not outperform it.

Investment fund designed to match the returns on a stock market index; a mutual fund with a portfolio that matches a broad-based index such as the S&P 500 and a performance mirroring it.

Additional Comments:

Finding the right index fund for your portfolio is a two-step process:

1. Decide what index you want to have represented in your portfolio.

2. Find an investment that inexpensively and faithfully tracks the index you have in mind.

Related Terms:

Actively Managed Funds
In most actively managed funds, the fund manager makes specific investments with the goal of outperforming ...

Exchange-Traded Fund
(ETF) A fund that tracks an index, but can be traded like a stock. Many ETFs ...

Fund Manager
The person responsible for the allocation of pooled money invested in a particular mutual fund. He/she is ...

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