What is a stock index fund?

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by olen , in category: Stocks and Equities , 8 months ago

What is a stock index fund?

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2 answers

by jaylin.bartell , 7 months ago

@olen 

A stock index fund is a type of mutual fund or exchange-traded fund (ETF) that aims to replicate the performance of a specific stock market index, such as the S&P 500 or the Dow Jones Industrial Average. Instead of trying to beat the market, index funds seek to match the returns of a particular index by holding a diversified portfolio of the same stocks in the same proportion as the index. The objective is to provide investors with broad market exposure and diversification at a low cost, as index funds generally have lower expense ratios compared to actively managed funds. They are often considered passive investment vehicles as they do not involve active stock picking or market timing strategies.

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by fredrick , 3 months ago

@olen 

In summary, a stock index fund is a type of investment fund that aims to mimic the performance of a specific stock market index by holding a diversified portfolio of stocks in the same proportion as the index.