Sentences with phrase «of closet index»

And some mutual funds, especially those that are truly active funds instead of closet index funds, actually have a chance of beating the index and can do so over extended periods of time.

The degree of diversification an investor uses is a choice that fits within value investing as long as it does not rise to the level of closet indexing («index huggers»).

Not exact matches

Much of what goes on in money management in the professional rank is a form of «closet indexing.»

They are «closet indexing» with the goal of not underperforming by enough to get fired.

It appears that the under - performance of active strategies is caused by «closet indexing».

If the active share of a fund is close to zero, then the fund is effectively a replica of the index, hence the term «closet indexer.»

The impact of capital loss (and closet indexing) is validated by the chart below, which illustrates the cumulative performance of $ 1.00 since September 2000 under two scenarios:

Closet indexing might stick to an index in terms of weighting, industry sector or geography.

The motivation for closet indexing grows out of years of poor performance and the ongoing shift from active to passive management.

In other words, the vast majority of professional investors are just closet index funds charging high fees.

There are still trillions of dollars captured by hedge funds, closet indexing funds, high fee 401K plans and high fee investment advisors.

It is the weakness of the index to be able to allow closet indexing to happen.

Bay Street's response to the Nortel fiasco of contracting out the index construction to S&P now seems like an impending loss in value for those indexed or «closet indexed» to the S&P TSX index.

Closet indexing is the result of active managers owning the market like an index fund, but charging active management level fees.

As of 2009 when the below chart ends, roughly half of mutual fund assets are indexed or closet indexed [ii].

Your investments are too important to leave it at the mercy of the market (index funds or closet index funds)

Thirteen major U.S. mutual fund companies have agreed to begin publishing data about how actively their funds are managed, following an investigation by the office of the attorney general of New York (NYAG) into the practice of «closet indexing,» NYAG announced Thursday.

A closet index fund is when the fund manager is simply trying to follow an index, which is a huge rip - off for you, since you could instead just buy an actual index fund and pay an MER of 0.5 % instead.

However, as a generalization I think it's pretty fair to say that the vast majority of mutual funds are closet - indexing leaches that do no one any good (except for the management companies who charge the high fees).

Charlie Munger points out that «[With] closet indexing, you're paying a manager a fortune and he has 85 % of his assets invested parallel to the indexes.

In this July 2006 research note titled Come out of the closet, or, show me the alpha James features a study that suggests closet indexing accounts for nearly one third of the US mutual fund industry.

He writes about how both closet indexing and shooting for the stars are exposing financial planners» clients to undue risk: «In a recent issue of Barron's, a money manager was quite critical of a particular stock, but said he owned it, although he was «underweighted».

A good example of the latter is «closet tracking» also known as «index hugging».