what is Index funds?

An index fund is a type of mutual fund or exchange-traded fund (ETF) that is designed to track the performance of a specific financial market index, such as the Standard & Poor's 500 (S&P 500) or the Dow Jones Industrial Average (DJIA). Index funds are considered to be a type of passive investment, as they aim to replicate the performance of an index rather than outperform it through active management.

Index funds are often used as a low-cost and diversified way to invest in the stock market. Because index funds are passively managed, they tend to have lower fees than actively managed funds, which can make them an attractive option for long-term investors. In addition, index funds provide investors with exposure to a broad range of stocks, which can help to mitigate the risk of investing in a single security or sector.