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  1. Home
  2. /Glossary
  3. /Index Fund
Back to Glossary
traditional-finance

Index Fund

A fund that tracks a market index like the S&P 500 by holding all its components.

Definition

A fund that tracks a market index like the S&P 500 by holding all its components. Index funds offer instant diversification and low fees. Most actively managed funds fail to beat simple index investing over the long term.

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Related Terms

ETF (Exchange-Traded Fund)

An investment fund that trades on stock exchanges like a regular stock.

Diversification

Spreading investments across different assets to reduce risk.

Accredited Investor

Someone who meets specific income or net worth thresholds set by regulators, qualifying them for investments not available to the general public.

Anti-Money Laundering (AML)

Laws and procedures designed to prevent criminals from disguising illegal funds as legitimate income.

Asset Allocation

How you divide your investments across different asset classes like stocks, bonds, crypto, and cash.

Blue Chip

A well-established, financially sound company or crypto project with a proven track record.

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