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ETFs
Understanding Index Funds: A Fundamental Overview
Fundamentally, an index fund represents a category of mutual fund or exchange-traded fund (ETF) meticulously designed to emulate the performance of a particular market index, such as the FTSE 100 or the Dow Jones Industrial Average. Rather than striving to surpass market performance, index funds are meant to repeat the returns of the underlying index upon which they are constructed. This is achieved through the maintenance of a diversified portfolio comprising stocks or other securities that closely mirror the composition of the targeted index.