Passive ETF

See: Exchange-Traded Fund (ETF).

An exchange traded fund lets you trade a basket of stocks in one investment. It's an all-in-one situation. Buy one ETF and you get a whole package of stocks.

A passive ETF is one based on an index or sector. The underlying basket of stocks aren't constructed by a money manager trying to pick winners. No one is in an office somewhere, staring at charts and graphs, choosing which stocks will go up and which will go down.

Instead, the basket of stocks is passive. It's the entire S&P 500, or an index representing the balloon manufacturers sector, or whatever. The stocks included aren't actively chosen. The ETF just tracks an existing index and leaves everything else alone.