Diversity

If you want the advantage of being able to invest in the overall market or a specialized market segment, index funds offer you the opportunity of matching the market’s performance for each segment you partake in. For example, the index funds allow you the opportunity to invest in the overall Dow Jones Industrial Average, S&P 500, NASDAQ Composite or a variety of established averages that are available. You may also invest in specific sectors of the market such as discretionary spending, precious metals, biotechnology, banking, retail and short-term corporate bonds, to name a few. Index funds are offered by mutual funds or through ETFs traded on stock exchanges such as the American Stock Exchange. Since they are not actively managed, the passive nature of these funds result in low maintenance costs, especially for any trading activities conducted through the ETF network.

Performance

References

Resources

Money Instructor.com: Benefits of Index funds

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