The goal of a passive portfolio is to track the index as closely as possible.

Question

Quizplus · Accepted Answer

This is because passive portfolios are designed to replicate the performance of a specific market index, such as the S&P 500, rather than trying to outperform it. The main advantage of this approach is that it typically involves lower fees and expenses than actively managed portfolios, which can make it a cost-effective way to invest in a broad range of stocks or other assets. However, passive portfolios also tend to be more susceptible to market fluctuations and may not be ideal for investors who are looking for higher returns or greater diversification.

The Goal of a Passive Portfolio Is to Track the Index