What are index funds?
Index funds allow Canadians to invest in hundreds of assets at once. Learn how index funds work at the MoneySense Glossary.
Why are mortgages so expensive in Canada?
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Index funds are mutual funds or exchange-traded funds (ETFs) designed to closely track, or mimic, the performance and characteristics of a specific index. An index isn’t an investment—instead it is measurement of the performance of a group of securities or assets. The S&P 500, for example, is a stock market index that includes about 500 large public companies in the United States. An index fund tracking the S&P 500 holds shares in all of its listed companies, or a representative sample. The composition of index funds doesn’t change very often, and these funds are passively managed, both of which help to keep fees low.
Example: “Because they contain hundreds or thousands of different securities, index funds can offer broad diversification.”
Read more on index funds:
- Ways to build a Couch Potato portfolio
You can create a Couch Potato portfolio in as little as one step, build a careful selection of mutual funds or ETFS, or go all-in as a self-directed investor. You can decide which is right for you with honest answers to a few questions. - Core Couch Potato portfolios
New to DIY investing? These four simple Core Portfolio approaches give you several options to get started. - What is direct indexing? Should you build your own index?
If you’re wealthy enough to be retired or semi-retired, you’re probably well positioned to consider a hybrid investing strategy known as direct indexing. - The MoneySense ETF Finder Tool
Which ETFs should you invest in? Which ones best suit your risk tolerance? What about personal ethics? Check out the MoneySense ETF Finder tool. - Switching from mutual funds to ETFs
Thinking about switching from high-fee mutual funds to low-fee exchange-traded funds? An investor advocate walks through the steps—and precautions—to follow when you’re ready.
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