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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

INDEX FUNDS

Try to track the performance of a particular market benchmark—or "index"—as closely as possible.

ACTIVELY MANAGED FUNDS

Try to outperform their benchmarks and peer group average.


Strategy

INDEX FUNDS

Buy all (or a representative sample) of the securities in the benchmark.

ACTIVELY MANAGED FUNDS

Combine research, market forecasting, and the experience and expertise of a portfolio manager or management team.


Other things to consider

INDEX FUNDS

Index funds tend to be more tax-efficient and have lower expense ratios than actively managed funds because they generally trade less frequently.

ACTIVELY MANAGED FUNDS

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 82% 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, 92% of Vanguard mutual funds performed better than their peer-group averages over the past 10 years.**

Open your account online

We're here to help

If you're new to Vanguard:

Call 800-252-9578

Monday through Friday
8 a.m. to 8 p.m., Eastern time

If you're already a Vanguard client:

Call 800-888-3751

Monday through Friday
8 a.m. to 10 p.m., Eastern time

REFERENCE CONTENT

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Market benchmark

An unmanaged group of securities whose overall performance is used as a standard to measure investment performance.