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Index funds have gained significant popularity in recent years as a passive investment strategy. These funds aim to replicate the performance of a specific market index, such as the S&P 500 or the Dow Jones Industrial Average. Unlike actively managed funds, index funds do not rely on the expertise of fund managers to select individual stocks. Instead, they hold a diversified portfolio of securities that mirror the composition of the chosen index.

By investing in an index fund, you essentially own a small piece of every company included in the index. This approach provides broad market exposure and eliminates the need for constant monitoring and decision-making. Index funds are designed to deliver returns that closely match the performance of the underlying index, making them an attractive option for long-term investors seeking a low-cost, low-maintenance investment vehicle.