Tradersguruji

  Definition & Examples of Index Funds An index fund is a type of mutual fund or exchange-traded fund (ETF) that seeks to track the return of a particular market index. It does so by investing in all or a portion of the securities in that index. Find out how index funds work and why these passively managed funds are a smart option for low-cost investing. What Are Index Funds? An index fund is a mutual fund or ETF that attempts to "track" or achieve the same return as a particular market index. The S&P 500 Composite Stock Price Index, Russell 2000 Index, and Wilshire 5000 Total Market Index are a few major indexes. The fund fulfills its objective to track an index primarily by buying the securities (stocks and bonds, for example) of the companies that make up the index. As such, index funds provide investors the opportunity to invest indirectly in an entire market without having to invest in the stock of the individual companies that it includes. How...