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Why doesn't an index fund that tracks an index consistently outperform the index?

Why doesn't an index fund that tracks an index (like the S&P) consistently outperform the index? I understand the fee structure to pay for turnover as well as for minimal management. However, shouldn't the fund profit enough off of stock leasing to a short seller to generate enough returns to outperform the actual index?

Mutual Funds, Stocks
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January 2019

Index funds are not designed to outperform indexes. They're designed solely to track or replicate a specific index. Keyword here is 'track', not 'outperform'. The other keyword here is 'index fund', not 'mutual fund.' Unlike mutual funds, index funds are passively managed, meaning there's no team of portfolio managers actively buying and selling in attempt to beat the market or picking specific securities over others in the underlying portfolio. Most index funds will either own every asset in that specific index it's seeking to track or seek to achieve the same end result by holding similar securities. As a result, there's no picking winners or losers, you're simply buying up an entire index and then participating in, not beating, it's performance. Here's a good Investopedia article on how index funds work.

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