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Glossary

Index fund

A fund that simply owns the whole market.

An index fund buys every holding in a benchmark — the S&P 500, a total market index, a bond index — in the benchmark's own proportions, rather than picking winners.

Because there is no research team to pay, fees are a fraction of an actively managed fund. Over decades that fee gap compounds into a large share of the final balance.

The trade-off is honest: you get the market's return, less a very small fee, and never beat it.

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