Index fund

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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.

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 ?
As an alternative to an index tracker, we have selected a basket of stocks based on sub-sector diversification, strong annual double digit earnings growth for the next three years, giving average upside of more than 20 per cent based on Bloomberg consensus, 12-month target prices (proposed in the Investment Solutions Weekly).
The difference between the performance of the Index Tracker and the index is called the "Tracking Error".
The [pounds sterling]470 million ($760 million) Global REITS Index Tracker Fund was launched by LGIM in 2006 and aims to provide global, diversified exposure to listed real estate equity markets around the world by tracking the FTSE EPRA/NAREIT Global Real Estate Index.
Ironically, the guide into the performance dumps might be one of the more risk-free routes out - that is, the index tracker staircase.
Germany's Deutsche Bank AG (NYSE: DB) (DBK.DE) has launched a new, investment orientated, benchmark index for offshore Renminbi (CNH) bonds, dubbed Deutsche Bank Offshore Renminbi Bond Index Tracker (DB ORBIT), allowing passive fund flows into the market.
OMGxT is the international arm of OMIGSA's domestic specialist index tracker boutique Dibanisa Fund Managers.
The most glaring example is the Deutsche UK Equity Index tracker fund.
Start saving into an FTSE All-Share Index tracker fund with regular monthly premiums of pounds 30 to pounds 50.
AKD Index Tracker Fund (AKDITF)###September 02, 2019###9.96###9.85
And he adds that nearly every FTSE All Share index tracker failed to beat the markets last year.
Cedri says: "Undoubtedly, the most recent development for index tracker funds is the decline in performance of almost all tracker funds over the last year, clearly demonstrating the point that tracker funds follow the index down as well as up.
HSBC Global Asset Management is considering the launch of its first emerging markets index tracker funds.