Index funds monitor a specific benchmark's or index's performance.

What is Index Fund

Oct 13, 2022

By- Rajendra

Image Credit- Unsplash


Instead of actively selecting the stocks to build a portfolio, the fund manager simply invest in all the stocks that make up the index to be followed.

Image Credit- Unsplash


Index fund's stock weighted average closely reflects the weighted average of each stock in the index.


The fund management just copies the index while creating the fund's portfolio and seeks to keep the portfolio in sync with the index.


The fund Manager copies the index while creating the Portfolio & seeks to keep the portfolio in sync with the index.


Due to tracking error, the fund usually does not deliver returns that are equal to those of the index.


For those who don't want to invest in mutual funds or individual stocks because of risk involved, index funds are the best option.


John Jack Bogle introduced Index Funds in 1976. A pioneering index fund, Vanguard 500 Index Fund tracked S&P 500 Index.

First Index Fund

Each index fund has a pre-selected assortment of hundreds or thousands of stocks, bonds, or occasionally both.

Well Diversify

They don't have to spend extra money on the knowledge & time needed to hand-pick stocks or bonds for each fund.

Lowest Cost