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Originally Posted by Machiavelli
Are index funds more similar to mutual funds or ETFs? What are your thoughts on index funds?
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As Slava points out, an index fund is simply a strategy that is tracking an index such as the S&P/Tsx composite. This is typically associated with ETFs which are more passive by nature (not all though), but could be in a mutual fund structure. I tend to use the terms ETF and indexing strategy / passive strategy interchangeably.
Indexes are rules-based, so there is no portfolio manager making decisions on what to buy and sell. Hence why they are cheaper. Most of the research shows that most active portfolio managers can't outperform the index anyways, so you're paying more for worse performance. Though this is a generalization.