Definition
A fund, either a mutual fund or an exchange-traded fund (ETF), that aims to match a market index rather than beat it.
The story
Instead of paying a manager to pick winners, an index fund simply holds what's in the index, like the 500 stocks of the S&P 500. Because there's little trading and research involved, fees are typically low.
Why markets watch it
Index funds have become one of the most popular ways to invest, and their buying and selling is a big part of daily market flows.
See it in the story
Connects to
We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms