Index Funds, Without the Fog
Learn how index funds are built, what they cost, and what risks they carry. Use a made-up example to compare funds and read their results more carefully.
For: adults.
Lessons
- A basket that follows a list – Explain how an index fund works using the basket comparison.
- How the list decides what belongs – Choose which of two pretend funds better matches a stated index rule.
- Why a wider basket can still have gaps – Spot the main concentration risk in a pretend fund’s holdings.
- Small fees, real arithmetic – Calculate the yearly fee on a hypothetical investment.
- Compare the whole picture – Choose the better-supported comparison between two hypothetical funds.