Definition of «closet indexing»

"Closet indexing" refers to an investment strategy where a fund manager claims to actively select and manage investments but actually mimics the performance of a broader market index, like the S&P 500. It means pretending to be actively managing while secretly just following the trends of a popular index.

Sentences with «closet indexing»

The banks tend to offer expensive closet index funds in their discretionary programs in many cases, where you're pretty much guaranteed to lag the indices by 2 %. (moneysense.ca)
In other words, the vast majority of professional investors are just closet index funds charging high fees. (pragcap.com)
As the indexing revolution has swept over these firms the high fee closet indexing mutual funds have been increasingly swapped out for the low fee index funds. (pragcap.com)
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