Investors index to achieve portfolio diversification at the lowest possible cost, but abandon any chance of outperforming the chosen benchmark. In contrast, active investors pay higher fees and incur the risk of underperforming the benchmark because they believe their managers will add value over time. With lower fees than active management, close benchmark tracking, but also the possibility of some incremental return, enhanced indexing is a compromise between the two. Conceptually based on indexing, enhanced strategies focus on risk and returns relative to the benchmark and seek to minimize the risk of underperforming the benchmark over all time horizons.