Index Fund

Rather than a fund manager choosing which stocks to buy, an index fund mechanically replicates an existing market index - if the index holds a stock at 8% weight, the fund holds it at roughly the same weight. This removes manager-selection risk and keeps costs low, at the cost of never beating the index (since it's designed only to match it, not outperform it). See our article comparing index funds and active funds for how the two approaches have historically compared over long periods.