What's the difference between an "index account" and an "index fund"

A friend was talking about how an “index account” is like an “index fund”, however, they are slightly lower returns, but zero downsides when the market goes down (it doesn’t go negative).

Curious what your thoughts are on index accounts, versus index funds. I believe I need to go through a company to purchase them (can’t just do it on trade, for example).

Thank you!

Thank you for the question, @Alexandra_Whitehead!

By “index account” it sounds like they are referring to some form of life insurance or annuity product that has returns that are loosely linked to an index. If that is what they are talking about, PFC is very against that. These types of products have high fees, don’t give you the dividends, are very complicated, and significantly lag the performance of index funds.

If you haven’t already, check out this PFC blog post!

I hope this helps! Let us know if there are any other questions!


Thanks so much @ShaneSideris - I believe you’re correct! I read the article just now, and the does sound like what was being described to me. I shall stay well clear of that :slight_smile:

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