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closet index fund

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Financial Dictionary

closet index fund

An investment company that claims to actively manage its portfolio but in reality emulates a market index such as the S&P 500. Closet index funds generally charge sales fees and annual expenses that are typical for an actively managed fund.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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