Investor Glossary-index fundInvestor Glossary-index fundInvestor Glossary-index fundInvestor Glossary-index fundInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Index Fund

The HTML to link to this page
 

An index fund is a portfolio of assets with allocation rules that remain fixed regardless of market conditions, commonly for the purpose of approximating the performance of some market index, such as the Russell 2000 Index. The index fund does not have to be linked to an existing index. Typically, an index fund is either a mutual fund or an exchange traded fund (ETF). John Bogle of the Vanguard Group proposed the index fund concept in 1975. They issued the first index fund, which matched the composition of the S&P 500. An index fund tends to have significantly lower fees and expenses than an actively managed fund because of its passive management style. Taxes are also reduced because less trading lowers realized capital gains for the index fund. Consequently, the typical index fund has outperformed the average of comparable actively managed funds by more than Bogle had originally anticipated. Even legendary fund manager Peter Lynch has stated that in most case an actively managed fund provides "no advantage" over an index fund.



Rate this index fund definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: reverse mortgage, current ratio, phantom income, APR, limit order, class C shares, labor relations, diluted share, covered put, dividends payable, debt service coverage, option premium, per diem, irrevocable trust, stock split, inflation, cancelled check, risk management, required rate of return, 1035 exchange, FICO score, 144a, minority interest, Key Rate Duration, average price per share, deferred revenue, liquidity ratio, command economy, annual return, LIBOR, quality assurance, VIX, ex-dividend, ex-dividend date, open position, in escrow, wholly-owned subsidiary, EBITDA, implied volatility, retained earnings, balance sheet, deferred tax, margin rate, 1031 exchange, Zero Cost Collar, FTSE, stock market close, 401a, real GDP


Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
Investor Glossary Index >>> # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
©2004-2014 Investor Glossary - All rights reserved - Terms of Use