What is the difference between index fund and mutual fund?

is there any difference, if so please explain.

Index funds are a specific type of Mutual Fund. Index Funds are a basket of stocks proportioned to Track a Particular INDEX there are many Indexes. One of the Most common is the S&P 500 INDEX

Standard and Poor created an Index of the Top 500 US Companies.

Many Index Fund Familys have an S&P 500 Fund. The Best way to differentiate them is by cost.

Indexes are called Passively Managed Ffunds as no one has to pick theStocks in the fund- S&P has defined the Stocks in the INDEX therefor it is cheap to manage.

Actively Managed Mutual Funds Cost More.

The Average Actively Managed Fund may have to beat a good INDEX Fund by 2-3% just to break even with the index.

I believe in Low Cost, Passively Managed Mutual finds. Vanguard is a nice Low Cost Family with lots of Indexses and Low Costs.

Costs Count
Invest
Invest in Bonds to Stabalize and decrease volatility
Balance with new money
STAY THE COURSE

Hope this helps.... Gerry

A mutual fund is a collection of stocks, bonds and other financial instruments, managed by an experienced financier. An index fund is a specific type of mutual fund that attempts to mimic certain financial indices, in order to get the same rate of return. For instance, an S&P 500 fund will only invest in stocks that are listed on Standard & Poor's 500 list.

Both are the same in having your fund invested in a pre-determined portfolio with prospect of receiving yearly distributable dividend after deducting management and other incidental charges.

The main difference is in its marketability. Index fund is listed on the stock exchange and can be bought and sold readily on the exchange while the mutual fund has to be bought and sold via the managers of the mutual funds.