Index fund

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    Index fundAn index fund is a security that tracks the performance of a particular index, such as stock market indices. Mostly, they themselves are traded on stock markets, making them so-called “exchange-traded funds”.

    Index funds form a substantial minority of global financial markets – around 12% in both the UK or US, for example.

    The most popular tracked index is the S&P 500, but funds can track whatever the managers decide to follow. Other popular funds track the Dow Jones, the DAX and other large indices.

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    Trading index funds

    As an investment, index funds often offer a better rate of return to investors compared to actively managed funds.

    Trading index funds follows the same principles like trading stock market shares making technical analysis a popular technique:

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