All of these factors, plus many more, confront the index fund manager.

FORBES: Passive Investing Doesn't Exist, But So What?

While active investment involves an asset manager making investments with the aim of outperforming a benchmark index, passive investment requires an asset manager to replicate the benchmark index by incorporating the constituent assets in similar proportions (weights) and thereby matching the returns of the index.

FORBES: BlackRock Priced A Bit Too Richly With Passive Investing So Popular

The Dow was up 80 points before pulling back after the Institute for Supply Management's purchasing manager index fell last month.

WSJ: Blue Chips Hold, End Higher