closet indexing


Investing strategy where an investor or investment manager tries to achieve a performance level reminiscent of a market index or average without actually purchasing the same securities that comprise the market index or average. In order to do so, an investor or investment manager may mimic an index's weights of stocks in each given industry or sector. Closet indexing is more difficult than passively investing in an index fund, and can be subject to more fees while providing approximately the same level of return as a typical index fund.
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closely held closing