Investing Basics
Index Fund
A fund designed to track the performance of an index.
Also called: passive fund
What it means
An index fund is a mutual fund or ETF built to follow a market index, such as the S&P 500. Instead of trying to beat the market by picking winners, it aims to match the chosen benchmark as closely as practical.
Why it matters
Index funds are a common low-maintenance option because they usually provide broad exposure and often have lower costs than active funds.