Index Fund vs ETF vs Mutual Fund: UK Guide

An index is just a list of companies, like the FTSE 100. It is a measurement, not something you can buy.

An index fund is a fund that tracks an index. It can be structured as either an ETF or a mutual fund (OEIC in the UK).

ETFs trade on a stock exchange like shares. Mutual funds price once a day and are bought directly from the fund provider.

For long-term UK investors, the wrapper matters less than the cost. A cheap global tracker, in either format, beats nearly everything else.