Index fund
Also called: index funds, passive fund, passive investing
A fund that aims to match an index's return by holding the same shares in the same proportions, at low cost.
Index funds do not try to pick winners, so they need no stock-picking team and can charge little. They fall with the market and are only as diversified as the index they track.
Learn more in these lessons
- Index funds and ETFsHow do index funds and ETFs work, and do they all return the same?
- Expense ratios and tracking errorHow much do fund costs matter, and how do you measure how well an index fund tracks?
- Active and passive fundsShould you choose an actively managed fund or an index fund?
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