expression

index fund

a fund that passively tracks a market index

In more detail

a mutual fund or investment fund that tracks a specific market index, such as the S&P 500, by holding the same stocks or bonds in the same proportions as that index

Examples

Many people invest in an index fund because it offers low fees and steady long-term growth.

How to use index fund

Index fund is a standard term in investment and finance contexts, used when discussing portfolio diversification and long-term investing strategies. It is typically contrasted with actively managed funds that employ professional stock-picking; index funds are often favored by investors seeking lower fees and consistent market returns. The term is neutral and informational rather than promotional or critical.

Common phrases

invest in an index fund
index fund performance
low-cost index fund
broad-based index fund
index fund manager
index fund strategy

Synonyms

tracker fund · passive fund · index-tracking fund · benchmark fund

Opposites

active fund · managed fund · actively managed fund

Word family

index · fund · indexing

A common mistake

Learners sometimes confuse index funds with index options or confuse them with the index itself; an index fund is a vehicle that invests according to an index, not the index itself.

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