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Personal Finance > Mutual Funds Guide to index funds: 3 of 3

To understand Index Funds, let's start at the basics and look at a Fund. Investing tools that hold multiple companies under one umbrella integrated by a specific investing theme are called "Funds". When we say Index Funds we usually refer to Mutual Funds or Exchange-traded Funds. In an Index Fund, stocks are grouped together from companies included within an index. For instance, the S&P 500 or the Dow Jones Industrial Average. In an attempt to mirror the index, the percentage of stock is kept the same as the indexes themselves. In spite of the fact that both ETFs and Mutual Funds fall unde...
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