what is the difference between index funds and equity funds?
In: Economics
An equity fund is one that invests in stocks, also called equity securities. The people managing the fund decide which stocks to invest in.
An index fund is one that invests in every stock in an entire index, like the Dow Jones or the S&P 500. If you invest in that fund, it’s like owning a piece of every stock on that index.
So an index fund may also be an equity fund if it invests in stocks, but not every equity fund is an index fund.
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