Fund representing a specific index
An index fund (also index tracker ) is a mutual fund or exchange-traded fund (ETF) designed to follow certain preset rules so that it can replicate the performance of ("track ") a specified basket of underlying investments.[ 1]
The main advantage of index funds for investors is they do not require much time to manage: the investors will not need to spend time analyzing various stocks or stock portfolios . Most investors also find it difficult to beat the performance of the S&P 500 Index;[ 2]
indeed passively managed funds, such as index funds, consistently outperform actively managed funds.[ 3] [ 4] [ 5]
Thus investors, academicians, and authors such as Warren Buffett , John C. Bogle , Jack Brennan , Paul Samuelson , Burton Malkiel , David Swensen , Benjamin Graham , Gene Fama , William J. Bernstein , and Andrew Tobias have long been strong proponents of index funds.[ 6]
^ "Reasonable Investor(s)" . SSRN 2579510 . Retrieved 2024-02-08 .
^ "Can Anybody Beat the Market?" . Investopedia . Retrieved 2022-01-03 .
^ "Mutual Funds That Consistently Beat the Market? Not One of 2,132" . The New York Times . 2022-12-02. Retrieved 2023-08-21 .
^ Choi, James J. (2022). "Popular Personal Financial Advice versus the Professors" . Journal of Economic Perspectives . 36 (4): 167– 192. doi :10.1257/jep.36.4.167 . ISSN 0895-3309 .
^ Malkiel, Burton G. (2013). "Asset Management Fees and the Growth of Finance" . Journal of Economic Perspectives . 27 (2): 97– 108. doi :10.1257/jep.27.2.97 . ISSN 0895-3309 .
^
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"Financial Wisdom from Jack Brennan, Former CEO of Vanguard" . Retrieved July 15, 2021 .
"Interview with Eugene Fama" . Retrieved December 1, 2007 .
"Are index funds still the way to go?" . Retrieved October 15, 2023 .
"Burton Malkiel Advocates for Direct Indexing" . Retrieved February 21, 2024 .
"Unless you're Warren Buffett, you're better off investing in an ETF, top economist says" . Retrieved March 13, 2024 .
"Paul Samuelson and the Birth of the Index Fund" . Retrieved September 3, 2011 .
"Burton Malkiel Advocates for Direct Indexing" . Retrieved February 21, 2024 .
"How To Build A Complete Benjamin Graham Portfolio" . Retrieved April 10, 2020 .
"Benjamin Graham: Passive Advocate?" . Retrieved Jul 20, 2023 .