An investor has a great deal of assurance, in advance, that an index fund will perform in line with the segment of the market that it is targeting. An active manager may outperform the market, but the manager may also underperform. You simply don't know in advance which it will be. Active managers don't necessarily stick to one segment of the market. This type of movement can throw your asset allocation plan off kilter.
Index funds remain true to their benchmark.
Operating expenses and management expenses are low. This advantage manifests itself in the long-term outperformance. Since index funds generally engage in much lower portfolio turnover than actively managed funds, index funds tend to realize and distribute only modest capital gains to shareholders. General Electric Co. GE is involved in a wide range of businesses, including airline engines, kitchen appliances, locomotives, lighting products, mortgage insurance, the NBC television network, aircraft leasing, commercial equipment financing, consumer finance, and commercial and residential real estate. Exxon Mobil Corp. Exxon Mobil is a petroleum and petrochemicals company.