The value of investments can fall as well as rise, and you may get back less than you invested. Past performance is no guarantee of future results.

Closet indexing definition

Closet indexing involves an active fund manager managing a fund so that it closely, but not exactly, tracks the performance of the fund’s benchmark index.

Closet indexing definition

Closet indexing involves an active fund manager managing a fund so that it closely, but not exactly, tracks the performance of the fund’s benchmark index.

It’s a practise that’s frowned upon because active fund managers are paid fees to try and outperform the underlying index and an investor could pay lower fees in a passive fund that tracks the index. See closet trackers definition.

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