Index Funds

Index fund

An index fund is a mutual fund or exchange-traded fund that has the goal of replicating, before fees and expenses, the performance of a stock market index or bond market index by holding the same securities as the index in the same proportions or, in the case of synthetic ETFs, by holding derivatives that produce the same return as the index. Index funds use passive management; they merely mirror an index and do not use stock picking. Many notable investors have recommended investing in index funds due to their diversification, low fees, simplicity for asset allocation, and historical outperformance over funds that use active management, partially explained by the efficient market hypothesis. Index funds are used by both individual investors and institutional investors such as pension funds.

Data Source : Wikipedia

• Related Topics:  Enhanced Indexing - In Finance, Enhanced Indexing Is Any Indexing Strategy Employed With The Intention Of Outperforming Strict Indexing. Enhanced Indexing Attempts To Generate Modest Excess Returns Compared To Traditional Index Funds And Other Passive Management Techniques., Exchange-Traded Fund - An Exchange-Traded Fund Is A Type Of Investment Fund That Is Also An Exchange-Traded Product; I.e., It Is Bought And Sold On Stock Exchanges. Etfs Own Financial Assets Such As Stocks, Bonds, Currencies, Cryptocurrency, Debt, And Futures Contracts, As Well As Commodities Such As Gold Bars., Passive Management - Passive Management Is An Investing Strategy That Tracks A Market-Weighted Index Or Portfolio. Passive Management Is Most Common On The Equity Market, Where Index Funds Track A Stock Market Index, But It Is Becoming More Common In Other Investment Types, Including Bonds, Commodities And Hedge Funds., Stock Market Index - In Finance, A Stock Market Index Or Stock Index Is An Index That Measures The Performance Of A Stock Market, Or Of A Subset Of A Stock Market. It Helps Investors Compare Current Stock Price Levels With Past Prices To Calculate Market Performance.