An index fund is a type of mutual fund with a portfolio constructed to match or track the components of a financial market index, such as the S&P 500 or NASDAQ. Index funds aim to provide broad market exposure, low operating expenses, and low portfolio turnover. These funds follow their benchmark index no matter the state of the markets and are considered passive investments, as they do not require managers to make decisions about which securities to invest in. They are popular among investors who prefer a passive investment strategy.
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Jenna Lofton, MBA is a stock trading and investment expert with over a decade of experience in the financial industry. She began her career as a financial advisor on Wall Street and now helps everyday investors make smarter financial decisions through StockHitter.com.
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