Enhanced Indexing

Enhanced Indexing
An investment philosophy that attempts to amplify the returns of an underlying portfolio or index fund while also minimizing the effects of tracking error. This type of investing is considered a hybrid between active and passive management and is used to describe any strategy that is used in conjunction with index funds for the purpose of outperforming a specific benchmark.

For example, an investor can short sell poor performing stocks from an index and then use the funds to purchase shares of companies they expect will have high returns. Investors can substantially outperform a benchmark over long time horizons by consistently eliminating their exposure to poor performing stocks and by using the proceeds to invest in other securities.


Investment dictionary. . 2012.

Игры ⚽ Нужна курсовая?

Look at other dictionaries:

  • Enhanced indexing — In finance, enhanced indexing is a catch all term that describes strategies employed to outperform traditional indexing. Enhanced indexing attempts to generate modest excess returns compared to index funds and other passive management… …   Wikipedia

  • Enhanced indexing — Also called indexing plus, an indexing strategy whose objective is to exceed or replicate the total return performance of some predetermined index. The New York Times Financial Glossary …   Financial and business terms

  • enhanced indexing — Also called indexing plus, an indexing strategy whose objective is to exceed or replicate the total return performance of some predetermined index. Bloomberg Financial Dictionary …   Financial and business terms

  • indexing plus — See: enhanced indexing …   Financial and business terms

  • Index fund — An index fund or index tracker is a collective investment scheme (usually a mutual fund or exchange traded fund) that aims to replicate the movements of an index of a specific financial market, or a set of rules of ownership that are held… …   Wikipedia

  • Dimensional Fund Advisors — Type Private Industry Finance Founded 1981 …   Wikipedia

  • Passive management — (also called passive investing) is a financial strategy in which a fund manager makes as few portfolio decisions as possible, in order to minimize transaction costs, including the incidence of capital gains tax. One popular method is to mimic the …   Wikipedia

  • Exchange-traded fund — An exchange traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks.[1] An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs… …   Wikipedia

  • Relative return — is a measure of the return of an investment portfolio relative to a theoretical passive reference portfolio or benchmark.In active portfolio management, the aim is to maximize the relative return (often subject to a risk constraint). In passive… …   Wikipedia

  • Повышенное индексирование — стратегия индексирования, цель которой состоит превышении или повторении общего движения определенного индекса. По английски: Enhanced indexing Синонимы: Интенсифицированное индексирование См. также: Стратегии индексации Финансовый словарь Финам …   Финансовый словарь

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”