Index funds in economics and finance

Hello everyone! Today, we're going to dive into the fascinating world of index funds. But before we get into the nitty-gritty, let's start with the basics. In simple terms, an index fund is a type of mutual fund or exchange-traded fund (ETF) that aims to replicate the performance of a specific market index, such as the S&P 500 or the FTSE 100. Rather than relying on active management, index funds are designed to passively track the index, making them an attractive option for many investors.