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Index Fund

An Index Fund has the sole investment objective of tracking the performance of a particular market index such as Hang Seng Index, S&P 500 or an iBoxx bond index. A typical Index Fund is passively managed, which means that constituent securities of the relevant index are bought and sold within the fund in accordance with their respective weightings in the index. This enables the fund to perform largely in line with the underlying market index.

Compared with actively managed funds, Index Funds typically trade less frequently, and result in lower administrative and management costs to fund holders.

Click here for an overview of the different types of MPF funds or learn more about the five major types of MPF funds with a visit to the MPF Investment Education Website.

Last Revision Date: 02/11/2015