Which of the following is true about index funds?
A) They consistently outperform 75% of actively managed funds.
B) They make no effort to select the best performing stocks.
C) They consistently underperform 75% of actively managed funds.
D) They outperform the market by selling the weakest companies in the index and weighting the strongest companies more heavily.

Question

Quizplus · Accepted Answer

Index funds aim to replicate the performance of a specific index by holding all or a representative sample of the securities in the index. They do not attempt to pick "winning" stocks or sectors but rather match the index's performance, making choice B correct.

Which of the Following Is True About Index Funds