An index mutual fund is a mutual fund that invests in index funds. An investment company that deals in index mutual funds have portfolio managers that manage the pool of people’s money and replicate the index funds as per the risk and reward characteristics. The index mutual funds are passively managed.
The size of the investment depends on the type of index that the mutual fund portfolio manager will invest in. Fortune five hundred is an index that includes stocks of 500 companies. Dows jones industrial is another index with 30 companies. And there is a 5000 companies index called Wilshire 5000 index.
