Index fund
A fund that tracks a market index, such as world shares, instead of picking stocks, usually at low cost.
Index funds give broad diversification for a small fee and are the building block of most FIRE portfolios. They follow the market down as well as up.
Tools that use it
Related terms
- ETFAn exchange-traded fund: an index fund you buy and sell on the stock exchange like a share.
- TER (total expense ratio)The yearly cost of a fund as a percentage of the amount invested, deducted from its returns.
- DiversificationSpreading money across many companies, countries and asset types to reduce the risk of any single loss.
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Investing
Investing in Switzerland: broad ETFs, domicile and fees
A plain guide to a low-cost portfolio from Switzerland: why broad index funds, how fund domicile affects withholding tax and what fees do over 30 years.