Question: I want to build a portfolio using only index funds, but I have trouble keeping them all straight. Can you explain which indexes do what?
Answer: Finding index funds that track specific security types or slices of the market has never been easier. In fact, Morningstar's database lists more than 1,700 index-based exchange-traded funds and mutual funds on the market today (not including funds of funds), with nearly half (48%) starting up within the past five years. With so many new index funds being introduced, it's easy to get lost among all the choices.