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).
Posts Tagged ‘index fund’
An Index Fund is…
Thursday, June 11th, 2009A Fund is…
Thursday, June 11th, 2009A 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.