Dividend funds invest mostly in common stocks which pay solid dividends. Its main goals are capital preservation and tax preferred income. The tax rate on dividend funds are lower, consult with your financial account, to know if this applies for your situation. Often called equity funds, invest mostly in the stocks of different companies. Creating capital growth is the goal.
Index funds are for the most part managed by a computer.
The advantage of an index fund is that you are guaranteed to do as well as the market does, or as bad. The management fees are much lower because there's no research required and few transaction fees. An index fund is one of the most convenient ways to invest in the stock market. Mortgage funds invest mostly in residential mortgages. This type of fund is for the investor who wants to avoid risk.