Index Funds

Definition ∞ Index funds are investment vehicles that aim to replicate the performance of a specific market index, such as the S&P 500. They hold a portfolio of assets designed to mirror the composition and weighting of their chosen benchmark. These funds offer diversification and typically have lower management fees compared to actively managed funds. They provide broad market exposure.
Context ∞ The concept of index funds is gaining traction in the digital asset sector, with products emerging that track the performance of a basket of cryptocurrencies. These crypto index funds allow investors to gain exposure to the broader digital asset market without selecting individual coins. News often covers the introduction of new crypto index funds as a sign of market maturation and increasing institutional accessibility.