Tracker Fund

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DEFINITION of 'Tracker Fund'

An index fund that tracks a broad market index or a segment thereof. Such a fund invests in all, or a representative number, of the securities within the index.

Also know as an "index fund".

INVESTOPEDIA EXPLAINS 'Tracker Fund'

The term "tracker fund" comes from the tracking function of index fund management, which attempts to replicate the performance of a market index.

Investing in an index fund is a form of passive investing. The primary advantage to such a strategy is the lower expense ratio on an index fund. Also, a majority of mutual funds fail to beat broad indexes such as the S&P 500.

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RELATED FAQS
  1. How much variance should an investor have in an indexed fund?

    An investor should have as much variance in an indexed fund as he is comfortable with. Variance is the measure of the spread ... Read Full Answer >>
  2. What can cause the rate of return to be negative?

    Several factors can cause an investment to have a negative rate of return. Poor performance of a company or companies, turmoil ... Read Full Answer >>
  3. What information should I focus on in my mutual fund's prospectus?

    The U.S. Securities and Exchange Commission (SEC) requires investment companies to provide potential and current investors ... Read Full Answer >>
  4. How can I get a free mutual fund prospectus?

    Mutual funds are sold via prospectus, as mandated by the Securities Act of 1933. The prospectus document outlines many features ... Read Full Answer >>
  5. Is there an index for tracking mid-cap stocks?

    There are several indexes for tracking mid-cap stocks. The most widely referenced is the S&P Mid-Cap 400, but others ... Read Full Answer >>
  6. What are the most popular mutual funds that invest in the automotive sector?

    There are few mutual funds that invest with a primary focus in the automotive industry, although major auto companies such ... Read Full Answer >>
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