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Passive_managementPassive management is a finance|financial strategy in which a fund manager makes as few Portfolio (finance)|portfolio decisions as possible, in order to minimise transaction costs, including the incidence of capital gains tax. One popular method is to mimic the performance of an externally specified Index (economics)|index - called 'index fund|index funds'. The ethos of an index fund is aptly summed up in the injunction to an index fund manager: "Don't just do something, sit there!"Passive management is most common on the stock market|equity market, where index funds track a stock market index. Today, there is a plethora of market indexes in the world, and thousands of different index funds tracking many of them. |
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