What is an index fund?

An index fund is a type of mutual fund whose holdings match or track a particular market index. It's hands-off, and you could build a diversified portfolio earning solid returns using mostly this type of investment.

What is a closed-end fund?

Closed-end funds are a lesser-known kind of mutual fund. Your best odds of success come when you buy them at a discount.

What is a target-date fund?

Target-date funds are designed to age with you by automatically rebalancing your portfolio from growth investments toward more conservative ones as retirement nears.

For investors, an index tracks the performance of a group of assets. The S&P 500 is a well-known stock market index.

What are money market funds?

Money market mutual funds are popular short-term investments with low risk. Yields on money market funds are more appealing than they used to be.

What is an equity fund?

Equity funds buy stock in a range of companies. Unless you have cash and time to burn, they're the better way to invest than buying individual company stocks.

Funds

Mutual funds, index funds and ETFs are an effective way to build a diversified portfolio of stocks, bonds and other investments.

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How to build a low-cost portfolio with index funds

Building the best investment portfolio for you can be challenging. There are lots of investment choices — how do you know which is the best? That's where index funds come in, which can help you build a well-diversified portfolio instantly while still allowing you to take advantage of stock market returns.