Index Fund
A fund that tracks a whole market group instead of trying to pick winners.
An index fund owns everything in a market benchmark — say, the 500 largest U.S. companies — rather than betting on a few. Because it isn't paying managers to pick stocks, it's usually very low cost, and low costs compound in your favor over the long horizons a kid's account enjoys.
Explain it to your kid
"A fund that owns a whole group of companies."
Related words
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