Compare index vs. actively managed funds
Take advantage of our low costs, no matter what kind of fund you choose.
What's the difference? It's based on your investing style.
Index and actively managed funds each have unique benefits that you'll be able to use to your advantage. It all comes down to how you want to put your money to work for you.
Goal
Try to track the performance of a particular market benchmark—or "index"—as closely as possible.
Try to outperform their benchmarks and peer group average.
Strategy
Buy all (or a representative sample) of the securities in the benchmark.
Combine research, market forecasting, and the experience and expertise of a portfolio manager or management team.
Other things to consider
Index funds tend to be more tax-efficient and have lower expense ratios than actively managed funds because they generally trade less frequently.
Though they attempt to beat the market, these funds can also miss their goals, resulting in losses for the fund—and its investors.
What you can always expect from Vanguard
Low costs
We strive to keep your costs low. No matter which of our top-quality funds you choose, you're getting them at some of the lowest costs in the industry. The average Vanguard mutual fund expense ratio is 84% less than the industry average.*
Top fund managers
Our fund managers—both our own experts and premier money managers we hire from around the world—make our funds stand apart year after year. In fact, 93% of Vanguard mutual funds performed better than their peer-group averages over the past 10 years.**
REFERENCE CONTENT
Market benchmark
An unmanaged group of securities whose overall performance is used as a standard to measure investment performance.