Index Fund
📈 Investing
Quick Definition
An index fund is a type of mutual fund or exchange-traded fund (ETF) designed to replicate the performance of a specific market index.
Examples
- 1An S&P 500 index fund that aims to match the performance of the S&P 500 by holding the same stocks in the same proportions.
- 2A total stock market index fund that invests in a broad range of U.S. stocks, aiming to mirror the performance of the entire U.S. equity market.
- 3An international index fund that tracks a global index, allowing investors to diversify internationally with a single investment.
- 4A bond index fund that tracks the performance of a bond index, providing exposure to the fixed-income market.
Tags
index fundETFmutual fundinvestment strategymarket indexportfolio management
Related Terms
Other terms you might find helpful
Diversification
An investment strategy that spreads risk by investing in a variety of assets across different sectors, industries, or asset classes.
Mutual Fund
A mutual fund is an investment vehicle made up of a pool of funds collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets.
Stock Market
The stock market is a collection of markets where stocks (shares of ownership in businesses) are bought, sold, and issued, reflecting the economic trends and the performance of companies.
Quick Info
Category:Investing
Difficulty:basic
Last Updated:6/19/2025