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The purpose of an index fund is to buy the entire market, under the assumption that an active fund will not outperform the market (after costs). If you want to
by MichaelDickens 8y ago
The purpose of an index fund is to buy the entire market, under the assumption that an active fund will not outperform the market (after costs). If you want to avoid certain companies, you should buy an actively managed fund.
- MrPowers 8y agoThere are different types of index funds. There are market capitalization weighted index funds that fit your description of buying the entire market, but there are also small cap funds, sector funds, value funds, etc. You can avoid certain companies (e.g. FAANG stocks) by buying certain indexes (e.g. a value index).