Index Fund
A mutual fund or ETF designed to track the components of a market index, such as the S&P 500. Index funds offer broad market exposure and low operating expenses.
Related terms
Exchange-Traded Fund (ETF)
A type of investment fund that holds a basket of assets and trades on stock exchanges like a single stock. ETFs often track an index, sector, or commodity.
Expense RatioThe annual percentage of assets a fund charges to cover management and operating costs.
Hedge FundA pooled private fund using flexible strategies leverage, shorting, derivatives for a limited group of investors.
Mutual FundAn investment vehicle that pools money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities, managed by a professional fund manager.
Net Asset Value (NAV)The value per share of a mutual fund or ETF, calculated by subtracting liabilities from assets and dividing by the number of outstanding shares.