Fidelity offers these so called "Enhanced Index Funds" that claim to offer better returns than a traditional Index fund. According to their site, "The funds' managers use computer-aided, quantitative analysis of historical valuation, growth, profitability, and other factors to select a broadly diversified group of stocks that may have the potential to provide a higher total return than that of the benchmark index." Doesn't this defeat the point of an index fund and is more like a traditional mutual fund or am I missing something?
the point of an index fund is to buy and hold a specific group of stocks for a long period. because of this, it means that you don't have to pay much to own the fund, because its not being actively managed.<p>enhanced index funds do a little more shifting around, from what i can tell, and because of that, the expense ratio is higher. based on the (admittedly cursory) research i did on enhanced index funds, they don't really provide you any truly better performing stock picks, but they do provide you with some different ones.<p>they're slightly more like traditional mutual funds, but only a bit.<p>edited to add: save your money and just buy normal index funds, unless you have some serious money and really want to diversify.