Management - 12manage

Index Fund

Description of Index Fund. Explanation.




  

Join our management communities

Register a Free Membership


Full Name:*
Company:  
Street + nr:*
City:*
State:  
Postal Code:*
Country:*
E-mail:* (This will be your username)

I agree to the Terms of Service.





 

Definition Index Fund. Description.

 

An Index Fund is a mutual fund or exchange-traded fund that mirrors its portfolio to that of a particular index, such as the DJIA, NASDAQ, Hang Seng Index or the S&P 500. The target is that its performance matches the performance of a the index.

 

They do not necessarily have to own all of the securities making up the index in the same composition; statistical sampling can be used.

 

Index funds assume that it is impossible to consistently outperform the market anyway because of Efficient Market Theory, so it is better to keep the costs low. Index Funds do that, because they are passively managed and do not require highly educated professional strategists and financial experts, since they merely mirror an index.
 


Forum

Comment on this Page

Compare with: Mutual Fund  |  Fundamental Analysis  |  Technical Analysis  |  Capital Asset Pricing Model  |  Behavioral Finance  |  Investor Sentiment  |  Institutional Investors  |  Rebalancing

 

Return to Management Hub: Finance & Investing

 

More on Management  |  Return to Management Dictionary  | 

 

End of description Index Fund. An explanation.

 

 

Copyright 2009 12manage - The Executive Fast Track. V10.4 - Last updated: 11/22/2009. All names tm by their owners.