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An index fund is a type of mutual fund whose holdings match or track a particular market index. It's hands-off, and you could build a diversified portfolio earning solid returns using mostly this type of investment.

That's because index funds don’t try to beat the market, or earn higher returns compared with market averages. Instead, these funds try to be the market — buying stocks of every firm listed on an index to mirror the performance of the index as a whole.

Index funds can help balance the risk in an investor's portfolio, as market swings tend to be less volatile across an index compared with individual stocks.

00:00 : What are Index Funds?
00:43 : Key Things To Know
2:29 : What is an Index?