Browse Definitions :
Definition

index fund

An index fund is a type of mutual fund collection that follows the trend of a given security or market index, which represents a number of sectors of a market and offers comprehensive exposure to several markets.

Index funds increase and decrease in value relative to the market index that they track. Examples of market indexes include the Russell 2000, Dow Jones Industrial Average and the Standard and Poor 500 (S&P 500). These indexes are traded on all major exchanges and make up 20% of equity of mutual fund assets in the United States as of 2014.

Index funds were offered to the public after numerous financial publications noted that the performance of mutual funds, which consist of chosen stocks, failed to meet market averages. Prior to index funds, investors in mutual funds had no option to simply invest in the average of a market. Because performance is based off average market trends, index funds are seen as a type of passive investing. The diversity of funds calls for less active management, which causes a decrease in investor expenses as less is spent on fund managers, analysts and researchers to help in the stock selection process. Simplicity and lower cost are seen as significant advantages, especially for those new to investing.

The first index fund was made available by the mutual fund company The Vanguard Group in 1974, founded by John Bogle.

This was last updated in November 2018

Continue Reading About index fund

SearchNetworking
SearchSecurity
  • man in the browser (MitB)

    Man in the browser (MitB) is a security attack where the perpetrator installs a Trojan horse on the victim's computer that is ...

  • Patch Tuesday

    Patch Tuesday is the unofficial name of Microsoft's monthly scheduled release of security fixes for the Windows operating system ...

  • parameter tampering

    Parameter tampering is a type of web-based cyber attack in which certain parameters in a URL are changed without a user's ...

SearchCIO
  • e-business (electronic business)

    E-business (electronic business) is the conduct of business processes on the internet.

  • business resilience

    Business resilience is the ability an organization has to quickly adapt to disruptions while maintaining continuous business ...

  • chief procurement officer (CPO)

    The chief procurement officer, or CPO, leads an organization's procurement department and oversees the acquisitions of goods and ...

SearchHRSoftware
SearchCustomerExperience
  • first call resolution (FCR)

    First call resolution (FCR) is when customer service agents properly address a customer's needs the first time they call.

  • customer intelligence (CI)

    Customer intelligence (CI) is the process of collecting and analyzing detailed customer data from internal and external sources ...

  • clickstream data (clickstream analytics)

    Clickstream data and clickstream analytics are the processes involved in collecting, analyzing and reporting aggregate data about...

Close