What is the primary benefit of index funds? They guarantee profits They actively outperform the market They offer broad market exposure at low costs They focus on short-term gains

Index funds are a type of mutual fund or exchange-traded fund designed to follow or track the components of a market index, like the S&P 500. The primary benefit of index funds is that they offer broad market exposure at low costs. They do this by investing in the same companies as the index they track, in the same proportions. This means that they provide investors with a simple, low-cost way to gain exposure to the entire market or a particular segment of the market. They do not guarantee profits, actively outperform the market, or focus on short-term gains. Instead, they aim to match the performance of the index they track over the long term.