DEFINITION of 'Indexing'

1. The adjustment of the weights of assets in an investment portfolio so that its performance matches that of an index.

2. Linking movements of rates to the performance of an index.


1. Indexing is a passive investment strategy. An investor can achieve the same risk and return of an index by investing in an index fund.

2. Examples of rates that could be linked to the performance of an index are wages or tax rates.

  1. Portfolio

    A grouping of financial assets such as stocks, bonds and cash ...
  2. Index

    A statistical measure of change in an economy or a securities ...
  3. Index Fund

    An index fund is a type of mutual fund with a portfolio constructed ...
  4. Asset

    1. A resource with economic value that an individual, corporation ...
  5. Index Hugger

    A managed mutual fund that tends to perform much like a benchmark ...
  6. Passive Management

    A style of management associated with mutual and exchange-traded ...
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