Index fund

(redirected from Index funds)
Also found in: Dictionary, Thesaurus.

Index fund

Investment fund designed to match the returns on a stock market index. Mutual fund whose portfolio matches that of a broad-based index such as the S&P 500 and whose performance therefore mirrors the market as represented by that index.

Index Fund

A mutual fund that is not actively-managed and simply tracks a benchmark index. That is, the investment company managing the mutual fund places the liquidity in securities represented in a certain index. Thus, when that index increases in price, so does the mutual fund, and vice versa. An exchange-traded fund is a prime example of an index fund. Many popular tracker funds track the S&P 500 and other S&P indices. An index fund is less commonly called an index fund. See also: Closet index fund, SPDR.

index fund

A mutual fund that keeps a portfolio of securities designed to match the performance of the market as a whole. The market is represented by a market index such as the S&P 500. An index fund has low administrative expenses and appeals to investors who believe it is difficult or impossible for investment managers to beat the market. Also called market fund.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Index fund.

An index fund is designed to mirror the performance of a stock or bond index, such as Standard & Poor's 500 Index (S&P 500) or the Russell 2000 Index.

To achieve that goal, the fund purchases all the securities in the index, or a representative sample of them, and adds or sells investments only when the securities in the index change. Each index fund aims to keep pace with its underlying index, not outperform it.

This strategy can produce strong returns during a bull market, when the index reflects increasing prices. But it may produce disappointing returns during economic downturns, when an actively managed fund might take advantage of investment opportunities if they arise to outperform the index.

Because the typical index fund's portfolio is not actively managed, most index funds have lower-than-average management costs and smaller expense ratios. However, not all index funds tracking the same index provide the same level of performance, in large part because of different fee structures.

References in periodicals archive ?

Vanguard International High Dividend Yield Index Fund follows an income investing strategy, focusing on companies with high dividend yields.

Vanguard launches 2 dividend-oriented funds

Many investors sing the praises of index funds. When you consider the recent dominance of indexes such as the S&P 500, what's not to like?

Inscrutable index funds

Bogle founded the Vanguard Group and in 1974 and in 1976 launched the First Index Investment Trust, the first index fund available to the public and the forerunner of today's Vanguard 500 Index Fund.

John Bogle Inspired Our Arkansas Firm

Compared to other types of equity funds, equity index funds also charge lower management fees since the fund manager doesn't need to do much to replicate the performance of the index.

How people with full-time jobs, no experience invest in stocks

Index funds, which are considered passive investments, actually outperform most actively managed mutual funds -- where well-paid professionals use their judgment to choose which stocks and other securities to buy and sell. For example, over the 15 years ending in June 2018, about 92% of U.S.

How To Build A $100,000 Portfolio -- Or An Even Bigger One

Initially derided as "Bogle's folly," index funds have become the default way to invest for so many people that some critics now worry about unintended, market-distorting effects that could ultimately hurt investors and society.

40 years after his "folly," Bogle's index funds reign

Miranda said BPI AMTC hopes to make every investor optimistic about the stock market through passively-managed peso equity funds in the country such as the BPI Philippine Consumer Equity Index Fund.

BPI equity index fund breaches P1 billion

He returned to the subject in a 2016 letter, writing, "Both large and small investors should stick with low-cost index funds." And in his newest shareholder letter, Buffett said that one reason he made a widely publicized bet (which he has now won) that a low-cost Vanguard index fund would outperform a group of hedge funds over a 10-year period was "to publicize my conviction that my pick -- a virtually cost-free investment in an unmanaged S&P 500 index fund -- would, over time, deliver better results than those achieved by most investment professionals, however well regarded and incentivized those 'helpers' may be."

Analysis: Warren Buffett's employees can't practice what he preaches

The BPI Philippine Infrastructure Equity Index Fund invests in common stocks of corporations that derive at least 50 percent of their revenue from infrastructure products or services, or have at least 50 percent of the fair value of their net assets being utilized for infrastructure-related business activities.

BPI's infra, consumer index funds hit P2 B

index fund provider, with a total of 36 funds with $155.9 billion in assets.

Schwab Launching 3 Equity Index Mutual Funds, Waiving Fees

Index funds are merely a vehicle for asset owners' views; the funds themselves do not drive equity market prices or individual stock prices.

Say Hello to a New Low-Cost Index Fund; Latest Thinking on Active vs. Passive

Overall, index fund use increased by 19.6% between 2011 and 2016, reflecting perhaps the growing interest in passive investing and low-cost options.

Next Generation

Financial browser ?

Full browser ?

CITE

Site: Follow: Share:

Open / Close