You may have heard about index funds from the likes of the Barefoot Investor or the legendary investor Warren Buffet.
An index fund is an investment portfolio that tries to track the whole or part of a specific financial market – typically the stock market.
There’s 3 key reasons that index funds have remain one of the investing world’s most popular investment options: low fees, diversification and performance.
What are index funds?
Index funds pool money from a large number of investors and then use the funds to create a diversified portfolio. This can include stocks, bonds, commodities or other assets.
Fund managers maintain the asset allocation of the index fund by tracking a specific index, such as the S&P 500, which is an index of 500 of the largest companies on the US stock market.
Notably, index funds often have low minimum investment requirements, low fees and high liquidity, making them a good choice …