🔢Intermediate
What Is an Index Fund?
The passive investing strategy that beats most pros
An index fund tracks a market index by holding all its components — no human picks stocks. Because there's no active management, fees are tiny (often 0.03%/year). Study after study shows 80–90% of active fund managers underperform a simple index fund over 15 years, after fees.
Quick check
Why do index funds outperform most actively managed funds over time?