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Index Hugger

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Financial Dictionary

Index Hugger

A mutual fund that tends to perform very similar to a benchmark index like the S&P 500.

Investopedia Commentary

These funds aren't very attractive to investors. They'd be better off just investing in an index fund, rather than an equity mutual fund that ends up performing the same as the index (because the fees are much lower in an index fund). To avoid an index hugger, look for fund managers who are aggressive and individualistic.

Related Links

Index Investing Tutorial
You Can't Judge an Index Fund by Its Cover

See also: Benchmark, Fund Manager, Index Fund, Mutual Fund, S&P 500

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