Passive Return
Passive return is the portion of a portfolio's total return that arises from market movements when the portfolio follows a passive strategy, such as index tracking. It reflects the benchmark's performance, net of fees and expenses.
Example: Example: A portfolio designed to track the S&P 500 through an index fund would generate a passive return close to the index's total return after fees; for instance, if the index returns 8% in a year and the fund charges 0.10% in expenses, the estimated passive return would be about 7.9% (ignoring tracking error).
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