Many investors own stock via an index fund, while many aren’t aware about the term. This article is tailor-made for the latter group. So, if you have your money already invested in index funds, there wouldn’t probably be anything new for you in this article.
For starters, let’s begin with basics. An index fund is a kind of mutual fund that provides an opportunity to trace the profits earned on market index. Index? An index is nothing but a bunch of securities usually representing a specific segment like bond market or stock market. Examples of companies that produce such indexes are Dow Jones and Standard & Poor’s.