Posts Tagged ‘index fund’

An Index Fund is…

Thursday, June 11th, 2009

An index fund is a mutual fund, or compilation of instruments (such as stocks, bonds, housing, art, commodities), that mimic the composition of an index. For example, if the index fund replicates the S&P 500 index, all 500 stocks (in the appropriate percentages) would be in that fund. Because it’s a mutual fund, the monetary value of an index fund is determined at the end of each trading day (as opposed to the price of a stock, which fluctuates throughout the day).

A Fund is…

Thursday, June 11th, 2009

A fund is an organization or legal structure set up to manage and control a certain amount of money.  Each fund has a specific investment objective. For example, an equity mutual fund invests in stocks, a private equity fund invests in non-public companies, and a bond fund invests in fixed income instruments.