Index funds are investment funds that aim to replicate the performance of a specific market index (e.g. SMI). Index funds invest in a wide range of securities, such as stocks or bonds, that represent the underlying index. Their aim is to replicate the index as closely as possible and achieve the same return. Index funds provide investors with a low-cost, broadly diversified investment option as they invest in a variety of companies or securities that are included in the index. Unlike ETFs, index funds are not traded on an exchange, but are bought and sold directly from the fund company. Purchases and sales take place at specific times (daily, weekly, monthly or sometimes less frequent).