A passive fund is a fund that:

Question

Quizplus · Accepted Answer

A passive fund invests in the companies that constitute a broad market index, such as the S&P 500 or the Dow Jones Industrial Average. It does not try to time the market or pick winning stocks using technical analysis. Instead, it aims to mimic the performance of the entire market, providing investors with exposure to a diversified portfolio of stocks at a low cost. By contrast, an active fund tries to beat the market by picking stocks that are expected to outperform, often resulting in higher fees and taxes.

A Passive Fund Is a Fund That