what are index funds

An index fund is a type of investment fund, either a mutual fund or an exchange-traded fund (ETF), that is designed to replicate the performance of a specific market index, such as the S&P 500 or the Dow Jones Industrial Average. It is considered a form of passive fund management, as it aims to mimic the composition and performance of the chosen index rather than actively selecting individual investments. Index funds are popular for their broad market exposure, low operating expenses, and low portfolio turnover. They are often recommended for long-term investors due to their diversification, lower risk, and cost-effectiveness