Enhanced Index Funds

An Enhanced Index fund is a mutual fund that tracks a specific index but includes modifications in how the fund is assembled. These funds differ from regular index funds, as they are actively managed and usually have higher fees. These funds also have a higher upside potential than traditional index funds, but they also present a higher amount of risk. Since these funds track indices, it is common for the funds to at least perform mostly in-line with the overall market. However, the funds aim to outperform the market since the fund managers will often replace underperforming stocks with high growth stocks.