Index funds are typically structured as either mutual funds or exchange-traded funds, but investors can manually recreate an index through 'direct indexing.'

1. “Index fund” is an umbrella term for funds that are passively managed and track a major stock index, like the S&P 500 or the Dow Jones Industrial Average.

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2. Direct indexing allows investors to customize their investments by directly buying shares in the companies listed in an index, rather than buying into a fund that tracks an index.

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3. When structured as mutual funds, in which multiple investors contribute capital that is then invested as a single fund, index mutual funds tend to replicate the makeup of the larger indexes.

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4. Index ETFs can be traded multiple times a day, like a traditional stock.

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5. Index mutual funds, however, can only be bought or sold once per day.

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