| a fund, as a mutual fund or pension fund, with a portfolio that contains many of the securities listed in a major stock index in order to match the performance of the stock market generally. |
| index fund n. A mutual fund that keeps a portfolio of stocks designed to match the performance of a stock market or one of its sectors as measured by an index of selected stocks. Also called market fund. |
Index Fund
A portfolio of investments that are weighted the same as a stock-exchange index in order to mirror its performance. This process is also referred to as indexing.
Investopedia Commentary
Investing in an index fund is known as passive investing. The primary advantages to such a strategy is the lower management expense ratios on index funds. Also, a majority of mutual funds fail to beat broad indexes such as the S&P 500.
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Index Investing Tutorial
Advantages Of Exchange-Traded Funds
You Can't Judge an Index Fund by Its Cover
The Lowdown On Index Funds
See also: ETF, Index, Index Hugger, iShares, Mutual Fund, Passive Management
index fund