Do Enhanced Index Funds Live up to Their Name?
Uninformed investors would expect enhanced index funds (EIFs) to live up to their name and enhance portfolio performance. This updated and thorough comparison of EIFs and pure index funds finds that EIFs, as a whole and in domestic stock fund categories, appear to have performed worse than their pure index funds counterpart with lower returns, higher risks and lower risk-adjusted returns. EIFs behaved more like actively managed funds, with higher expense ratios and turnover rates. Investors should be wary of sales pitches hyping the value of EIFs! [ABSTRACT FROM AUTHOR] Copyright of Financial Services Review is the property of Academy of Financial Services and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Finance and General Business
Enhanced index funds, Index funds, Portfolio performance, Risk-adjusted return
Chang, C. Edward, and Thomas Krueger. "Do Enhanced Index Funds Live up to Their Name?." Financial Services Review 19, no. 2 (2010): 145-162.
Financial Services Review