An Index Fund is an investment vehicle that aims to replicate the performance of a specific market index. It does this by investing in all of the stocks, bonds, commodities or other securities included in the index, typically in proportions similar to their weighting in the index itself. By doing so, it offers investors a potentially lower-risk and more cost-effective way to invest than buying single stocks or actively managed funds. Index Funds are often viewed as a good starting point for new investors who are looking to diversify their portfolios without having to manage them actively.