Tier 2 – Core Mutual Funds

Investing Style: A broad selection of equity index funds designed to mirror a market index or benchmark

Passively managed funds—commonly known as “index funds”—seek to approximate their benchmark’s performance, rather than beat their benchmarks. A benchmark is what the investment’s returns are compared to in order to measure performance. Because the objective is to simply mirror the holdings and return of an index, less research is needed, transactions occur less frequently, and expenses tend to be lower than those of actively managed funds.

Ultimately, index funds are designed to provide exposure to a broad selection of securities at a relatively low cost. While these funds typically perform very similarly to the index they track, you should be aware that index funds cannot be expected to meet or beat the index’s performance.