An Index Fund mirrors a stock market index (e.g., S&P 500, Dow Jones). The fund buys the same stocks as the index in the same proportion.

There are two types of Index funds

1. Market-weighted: Stocks with a higher market value have a greater impact.

Equal-weighted: Each stock is given equal weight, regardless of size.

Given that Index funds are aggregation of stock market index / trends, it is ideal for long-term investors who want to benefit from market growth!

Less frequent trading also reduces trading cost and mistakes. 🚀