An index fund follows a radically different philosophy from an active fund: instead of a manager labouring to pick winners, the fund buys all the components of a specific index at their weights — so its investors earn roughly the market's return, no more, no less (before small fees).
The power of the idea is cost: tracking an index is nearly mechanical, so fees are typically a fraction of active management fees. Long-run research across many markets shows most active funds fail to beat their index after fees over long horizons.
In the Saudi market, exchange-traded index funds (ETFs) track various local indices, some shariah-compliant, with units tradable intraday like stocks.
What an index fund does not offer: protection in falling markets. If the index drops 20%, the fund drops fully with it — it promises to match the market in both directions, not to beat it in either.