Money WondersPlay

Funds & IndicesFunds

Active and Passive Funds

Picking stocks or buying the whole list

Some funds pay experts to pick winners. Others simply buy the whole list. Which one would you guess costs 13 times more?

You'll find out

  • What an active fund does for its fee
  • What an index fund never tries
  • How far apart their fees are

Why it matters

Most 401(k) menus offer both kinds. Knowing which is which tells you what you're paying for.

About 3 min6 interactive slides · 5 questionsLesson 103 · Zone 12

Play this lesson

Free to play in your browser or on iPhone

More in this zone

  1. 100FundsA Basket Instead of One EggA fund holds many investments at once
  2. 101IndicesWhat an Index IsA list that stands in for the whole market
  3. 102IndicesThe Dow Started With 12Only one original member lasted into this century
  4. 104FeesWhat 1% Costs Over a LifetimeA small fee can take a big slice of the result
  5. 105Active ManagementMost Pros Beat the MarketOver 15 years, most US stock funds trailed the S&P 500
  6. 106SimplicityBuffett's Million-Dollar BetA plain index fund beat a hand-picked set of hedge funds over ten years
  7. 107FundsETFs and Mutual FundsTwo wrappers for the same basket
  8. 108Investor BehaviorDoing Nothing Is HardPeople who traded the most earned the least