Wednesday, December 29, 2010

Enhanced Index Fund

An Enhanced Index Fund or EIF, is a fund which actually uses active management to make modifications to the traditional index tracking fund such as using leverage, larger or equivalent position sizes, exclusion of certain securities, etc. The goal of an enhanced index fund is to offer returns like an index, but better - i.e. the goal is to outperform the index. Thus an EIF is likely to have greater fees and return variance than a pure index fund.

Synonyms: EIF, Active management

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