Index Fund

Mutual fund that has a portfolio matching that of a broadbased portfolio such as, the Dow Jones Industrial Average or the S&P's 500 Index. Investors in this type of fund believe the market can't be beaten over the long run so this type of investment will let them keep pace with whichever index they follow. Usually, the cost of this type of fund is less then an actively managed portfolio since an index fund only follows an index.