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Posted by: La on 2010-07-11, 15:02:34
It's a fund that follows an index such as S &P 500 - see Exchange Traded Funds (ETF). The S &P 500 have shown a history of growth and there are 500 companies that this index follows. It is almost impossible, unless you are rich, to invest in every company within this index. If you want to invest in this index/ all 500 of these companies, you would buy an ETF of that index. An ETF trades like a stock. It has low fees, but may also have lower returns. It is similar to a mutual fund, but with less fees and not actively managed. |
