What is the difference between an index fund and a mutual fund?

An index fund and a mutual fund are both types of investments. An index fund is an investment that tracks a stock market index, such as the S&P 500. This means that the fund is designed to replicate the performance of the stocks in the index, such as the stocks that make up the S&P 500. A mutual fund is a fund that is managed by a professional fund manager, who purchases and sells a variety of stocks, bonds and other securities. The fund manager attempts to outperform the stock market and provide investors with higher returns. The main difference between the two funds is that an index fund is passively managed and the fund manager simply seeks to replicate the performance of the stock market index, while a mutual fund is actively managed and the fund manager attempts to outperform the stock market. Additionally, index funds typically have lower management fees than mutual funds, because the fund manager does not have to actively purchase and sell securities to try to outperform the stock market. In Washington, investment fraud law is designed to protect individuals from fraudulent investment activity. The law provides for civil and criminal penalties for those who engage in fraudulent activity. Additionally, investors in Washington can contact the Washington State Department of Financial Institutions for assistance if they feel that they have been the victim of investment fraud.

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What is the difference between an index fund and a mutual fund?

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