Index Investing Definition

Learn the definition of index investing and other ETF terminology from the etf.com glossary.

ETF
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Reviewed by: etf.com Staff
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Edited by: etf.com Staff

Learn more about Index Investing

Index Investing in ETFs represents a passive strategy focused on tracking a specific market index. These ETFs aim to replicate the performance of the benchmark index, offering investors diversification, transparency and often lower fees compared to actively managed funds. The appeal of index investing lies in its straightforward approach, aligning with a ""set it and forget it"" approach. By mirroring the composition and returns of an index, these ETFs provide investors with a systematic and disciplined means of gaining exposure to various market segments, making index investing a popular choice for those seeking broad market representation within the realm of exchange-traded funds.

Related Terms

 Exchange-Traded Fund, Index Based

ETF Glossary is etf.com’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock exchanges, and they can encompass a wide range of asset classes, including stocks, bonds, commodities and more. Given the diverse range of ETFs and the complexity of financial markets, having a clear understanding of ETF-related terminology is instrumental for investors looking to make informed decisions, manage risks effectively and navigate the evolving landscape of ETF investments.