A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- Index FundA fund that owns a broad slice of the market at low cost — the backbone of most investing.
- Mutual FundA pooled investment where many people's money is combined and managed together to buy a mix of stocks or bonds.
- Expense RatioThe yearly fee a fund charges, shown as a percentage of your investment, that covers its operating costs.
- DiversificationSpreading your money across many different investments so a drop in any single one does less damage.
- NAV (Net Asset Value)The per-share value of a fund, calculated by dividing its total holdings' value by the number of shares.
- Stock MarketThe network of exchanges where shares of public companies are bought and sold by investors.
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Plain-English education — not personalized legal, tax, or investment advice.