Funds and indexes
A fund pools many people's money and buys many things at once. An index is a list that follows a group of companies.
A fund
Put €100 into a fund that holds 500 companies, and you own a tiny slice of all 500. One purchase, many companies.
An index
An index is a list of companies with a score that moves with their prices. The Euro Stoxx 50 follows 50 big euro-area companies; the MSCI World follows large companies in many rich countries.
Index funds and ETFs
An index fund simply copies an index instead of choosing companies, so it is usually cheap. An ETF is a fund you buy and sell on an exchange, like a share. Most ETFs are index funds.
Active funds
In an active fund, managers choose what to buy. They charge more for it, and many end up doing worse than their index once their fees are taken off.
Every fund has a yearly fee
It is taken from your money every year, even in bad years. It is on the fund's key information document as "ongoing costs".