Index Fund

A mutual fund or ETF designed to replicate the performance of a specific market index by holding all (or a representative sample) of its constituent securities. Vanguard founder John Bogle launched the first retail index fund in 1976, and his low-cost, passive approach has since attracted trillions of dollars as study after study showed that most active managers fail to beat their benchmarks over the long term. Index funds have become the default recommendation for the vast majority of individual investors.