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Glossary · from the DESK dictionary

Index Fund

An investment fund designed to track the performance of a specific market index as closely as possible.

In plain words

Follows a passive approach rather than active stock picking, typically resulting in lower fees.

What it means for traders

A foundational investment vehicle in passive investing, closely related to ETFs.

Common pitfalls

Fully mirrors the underlying index's losses as well, with no ability to hedge.

Related terms

Equity Index Fund · Bond Indexing · Enhanced Index Fund · Eugene Fama · Index Rebalancing · Index Inclusion · Index Investing · Index Option · Index Provider · John Bogle · Optimization Approach to Indexing · Passive Fund Management · Tracking Error

From the DESK dictionary. For information only, not investment advice.

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DESK is a research tool and not investment advice. Page generated: 2026-10-12.