Financecalendar_todayLast updated: Apr 2026
What is Index Fund?
/ˈɪndɛks fʌnd/
An index fund is a type of investment that tracks a market index — like the S&P 500 — by holding the same stocks in the same proportions. It requires no active management.
lightbulb
Everyday Example
Instead of picking individual stocks, buying an index fund is like betting on the entire Premier League doing well, rather than just one team.
publicReal-World Application
“Warren Buffett has repeatedly stated that most investors — including institutions — would do better holding a low-cost S&P 500 index fund than paying fund managers.”
psychology
Did you know?
Index funds were invented by John Bogle, founder of Vanguard, who launched the first retail index fund in 1976 to widespread ridicule from Wall Street.
emoji_objects
Key Insight
Index funds beat the majority of actively managed funds over 10+ year periods, largely because their fees are dramatically lower.
Want to learn Index Fund in 60 seconds?
Join 50,000+ learners snacking on knowledge daily.