Enhanced index fund

Enhanced Indexing

A portfolio management strategy that mainly tracks a certain index but is designed to perform slightly better than that index. Typically, enhanced indexing involves holding roughly the same securities as the index in roughly the same proportion; however, the portfolio manager often overweights certain stocks or industries if he/she believes them to be undervalued. This process is called tilting. See also: Enhanced index fund.

Enhanced index fund.

An enhanced index fund chooses selectively among the stocks in a particular index in order to produce a slightly higher return. By contrast, an index fund strives to mirror the performance of a particular index by owning all the stocks in the index.

The goal is to narrowly beat the index anywhere from a fraction of a percent to two percentage points, but not more. A wider spread would classify the enhanced fund as an actively managed mutual fund rather than an index fund.

Enhanced index fund managers may achieve higher returns by identifying the undervalued stocks in the index. Or they might adjust holdings to include a larger proportion of securities in higher performing sectors, or use other investment strategies, such as buying derivatives.

While enhanced index funds may expose you to the risk of greater losses than their plain-vanilla counterparts, they may also offer an opportunity for higher returns.

References in periodicals archive ?
A fund is classified as passive if it calls itself an index fund, enhanced index fund, or ETF.
My data-points screening below indicates that of those 26 funds, none, not even one, was an Index Fund or an Enhanced Index Fund, leaving all 26 as actively managed funds.
For clients that might consider a small cap fund, the Voth Nixon Group provides supplementary options which include: VNX Stock Selector Small Cap Fund (retail and Advisor share classes); VNX Small Cap Value (retail and Advisor share classes); VNX Small Cap Stock Fund; VNX Advisor Small Cap Fund; VNX Small Cap Growth Fund (retail and Advisor share classes); and VNX Small Cap Enhanced Index Fund.
An enhanced index fund is a portfolio that seeks to achieve superior returns, but mirrors the risk profile of the average it's based on.
For investors considering a small cap fund, Fidelity offers several additional options, including: Fidelity Stock Selector Small Cap Fund (retail and Advisor share classes); Fidelity Small Cap Value (retail and Advisor share classes); Fidelity Small Cap Stock Fund; Fidelity Advisor Small Cap Fund; Fidelity Small Cap Growth Fund (retail and Advisor share classes); and Fidelity Small Cap Enhanced Index Fund.
It's essentially an enhanced index fund based on the Dow Jones industrial average, run by co-managers Charles Carlson and Richard Moroney.
My data-points screening below indicates that of those 25 funds, only three were Index Funds, and one was an Enhanced Index Fund, leaving 21 actively managed funds.
My datapoints screening below indicates that of those 47 funds, only one was an index fund, and none was an enhanced index fund, leaving 46 actively managed funds:
With an increasing number of individual investors seeking more institutional-like products for their portfolios, Fidelity strengthened its mutual fund offering by launching three new enhanced index funds: Fidelity Large Cap Value Enhanced Index Fund, Fidelity Large Cap Core Enhanced Index Fund and Fidelity Large Cap Growth Enhanced Index Fund.
The styles of the sub-accounts that are transitioning to Curian include Sector Strategy Portfolios, Index Strategy Portfolios, Target Strategy Portfolios, and an Enhanced Index Fund.
We offer tax-aware investments, separate account wraps, insurance funds, cash products and actively managed and enhanced index fund product offerings," says Gatch.

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