Active Index Fund

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Dictionary Says

Definition of 'Active Index Fund'

A type of index fund where a fund manager bases the fund's initial investment proportions according to the benchmark index in which the manager is attempting to track, and then proceeds to add what he/she believes to be higher performing stocks that are unrelated to underlying index. The fund manager will then actively manage the composition of these non-benchmark stocks in order to earn yields that exceed the benchmark index.
Investopedia Says

Investopedia explains 'Active Index Fund'

A fund manager that attempts to make an active index fund version of the Standard & Poor's 500 Index (S&P 500) would buy and periodically rebalance all the stocks to match the proportions found in the actual S&P 500. In addition, the manager will add stocks they believe will have a strong performance. For example, if the manager believes that the semiconductors will be hot during the subsequent quarter; more semiconductor stocks would be added to the portfolio.

While it is possible that some fund managers may be able to significantly beat the underlying benchmark index by using strategies, such as market timing, this is far from guaranteed. Furthermore, the active management aspect of the fund will likely incur higher expenses, which could eat away at some and perhaps all of the extra returns earned by active management.
Search results for

'Active Index Fund'

  • Passive Vs. Active Management | Investopedia

    http://www.investopedia.com/university/quality-mutual-fund/chp6-fund-mgmt
    ... Low operational expenses. Indexing is considerably less expensive than active fund
    management. Asset bloat. Portfolio size is not a concern with index funds. ...

  • Passive Vs. Active Management | Investopedia

    http://www.investopedia.com/university/quality-mutual-fund/chp6-fund-mgmt/passive-active.asp
    ... Low operational expenses. Indexing is considerably less expensive than active fund
    management. Asset bloat. Portfolio size is not a concern with index funds. ...

  • The Lowdown On Index Funds

    http://www.investopedia.com/articles/basics/03/032803.asp
    ... One of the major arguments of active managers is that, by investing in an index
    fund, investors are giving up before they have even started. ...

  • Index Mutual Fund Or ETF: Which Is Right For You?

    http://www.investopedia.com/articles/exchangetradedfunds/11/etf-or-imf.asp
    ... Make no mistake; most ETFs have been created for active traders and not ... fund investors
    are trying to beat the market and index mutual fund investors are ...

  • How can I buy an S&P 500 fund?

    http://www.investopedia.com/ask/answers/04/062404.asp
    ... Active Trading; Forex; Personal Finance; Real Estate; Retirement; Insurance; ETFs;
    Options/Futures; ... Today it is known as the Vanguard® 500 Index Fund. ...

  • Is it possible to invest in an index?

    http://www.investopedia.com/ask/answers/04/061104.asp
    ... Active Trading; Forex; Personal Finance; Real Estate; Retirement; Insurance; ETFs;
    Options/Futures; ... There are a variety of index fund companies and types to choose ...

  • The risk an investor is most likely to encounter when investing in ...

    http://www.investopedia.com/ask/answers/09/series66-022409.asp
    ... Active Trading; Forex; Personal Finance; Real Estate; Retirement; Insurance; ETFs;
    Options/Futures; ... encounter when investing in a Standard & Poor’s 500 Index fund ...

  • Index Your Way to Success

    http://stocks.investopedia.com/stock-analysis/2012/Index-Your-Way-to-Success-VTI-EFA-EEM-FXI-EWZ-VFINX0109.aspx
    ... Other studies simply show that 75% of active money managers fail to beat the S&P
    500 ... Yet by investing in an index fund, a man or woman with zero knowledge of ...

  • The Hidden Differences Between Index Funds

    http://www.investopedia.com/articles/mutualfund/03/061103.asp
    ... Funds. June 28 2010 | Filed Under » Index Fund, Investing Basics, Mutual Funds.
    Think of your trips to the candy store as a child. You ...

  • Index Your Way to Success

    http://stocks.investopedia.com/stock-analysis/2011/Index-Your-Way-to-Success-VTI-EFA-EEM-FXI-EWZ-VFINX0726.aspx
    ... Other studies simply show that 75% of active money managers fail to beat the S&P
    500 ... Yet by investing in an index fund, a man or woman with zero knowledge of ...

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