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Index fund

Index fundFund that mirrors the composition of a particular stock index

Like individual stocks, index funds can be traded on the exchange in continuous trading.

The performance of an index fund generally matches that of the benchmark index. Dividends are paid to the investor, and the administration costs of an index fund are usually lower than those of an ordinary mutual fund. One advantage of index funds is that they provide for greater diversification of risk than investors can achieve by purchasing individual stocks. Unlike index certificates, index funds do not have a maturity period, and thus there is no risk to the issuer.

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