What is an Index Fund?

• Let’s say your investments are cricketers competing in series of matches over a long
  period of time (your investment term in the market).
• Each cricketer represents a company you are invested in through an index fund.
• Each team is an index fund representing the best players in the country.
• A cricketer will be replaced if there are better players or if his long term performance
  starts dropping.
• This process of churn ensures that only the best performing cricketers (investments)
  are chosen to represent the country/team (Index Fund).
• Also, the best players (performing companies) keep replacing the ones who retire
  (companies that have stopped functioning).
• In the end, with index funds you are rewarded with the best performing companies
  (cricketers) over your investment term (matches).
• Just like in cricket, in an index fund, performers stay and non performers are removed.