Index funds are often preferred to mutual funds because:

Question

Quizplus · Accepted Answer

Index funds typically have lower management fees than actively managed mutual funds because they are passively managed and do not require a team of analysts and researchers to select and manage investments. This cost savings can result in greater returns for investors over time. While index funds also offer greater diversification and liquidity, these factors are not necessarily the primary reasons why they are preferred over mutual funds.

Index Funds Are Often Preferred to Mutual Funds Because