Composite Index

The S&P, the DOW, the Nasdaq, Russell 2000, are all composite indices, comprising a combination of equities used to measure market performance over time.

The dark spectre for active money managers is that index funds, or composite indexes, are now readily and easily investable by essentially...everyone. Most index fund complexes allow Joe Plumber to open an investment account with just $250 down. The challenge runs that, in bull markets, index funds generally beat managed funds, and most of the time (think: 75-80% of the time) the market goes up. So the rise and advent of these composite index funds has become a threat to the previous existence of active money management on Wall Street.