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 trackers definition

A closet tracker is a fund that is supposed to be actively managed but in fact is run in a hands off manner and only manages to make returns akin to those of a real tracker fund.

Closet trackers definition

A closet tracker is a fund that is supposed to be actively managed but in fact is run in a hands off manner and only manages to make returns akin to those of a real tracker fund.

There have been several scandals involving closet tracker funds whereby investors pay high fees for outperformance but these would be unachievable given the hands-off way in which the funds were being run.

In these cases, investors would have been better off invested in a real tracker fund that tracks the performance of benchmarks like stock indexes because the fees would have been lower. See also closet indexing.    

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