Series 66: 3.1.2.5 Index Funds

Taken from our Series 66 Online Guide

3.1.2.5 Index Funds 

Index funds are mutual funds set up to track the returns of a specific market index. An index contains a group of securities meant to represent a particular market segment.  

Well-known indexes include: 

  • -S&P 500 (500 large capitalization stocks) 
  • -Wilshire 5000 (total US stock market) 
  • -Russell 2000 (small capitalization stocks) 
  • -MSCI EAFE (foreign stocks)  
  • -Bloomberg Barclays US Aggregate Bond Index (total US bond market) 
  • -Nasdaq Composite (stocks listed on the Nasdaq exchange) 
  • -Dow Jones Industrial Average (30 large-cap, blue-chip stocks) 

An index fund will typically hold securities -- stocks or bonds-- in the same proportion as the index it is trackin

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