What Is an Index Fund and How Does It Work?

1 An index fund does not try to beat the market. It tries to be the market, minus a very small fee.

2 Nobody at an index fund decides which companies to buy. A published rulebook decides for them.

3 A 0.79 point fee gap turned a 10,000 pound pot into 35,094 instead of 42,315 over 25 years.

4 The account you hold the fund in, 401(k), ISA or TFSA, often changes your outcome more than the fund does.

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