index fund

Definition

A passively managed mutual fund that tries to mirror the performance of a specific index, such as the S&P 500. Since portfolio decisions are automatic and transactions are infrequent, expenses tend to be lower than those of actively managed funds.

Use index fund in a sentence

The index fund was an interesting thing and I put a lot of energy into making it work for the people involved.

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The choice to buy the index fund meant that Mary had to devote more time to managing her investment, which wasn't financial prudent in the long run.

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The index fund was an especially popular investment choice for the financial adviser's clients as many people wanted to play the stock market but were uneducated.

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John Bogle closet indexing