There are a number of ways in which closet index funds might be able to be identified.

The first of these is active share.

Active share was first developed in 2009 and tries to quantify the extent to which the portfolio manager has made decisions to invest actively in the portfolio away from the benchmark.

Active share has a value of between 0% and a hundred percent with the higher the active share the more positions in the portfolio which are different from that of the index.

An active share statistic of over 60% is generally held as being a good identifier of an actively managed portfolio.

An active share of between 20% and 60% May well indicate a closet Index Fund where the portfolio manager is holding a majority of positions, which closely match those of the index.

Passively managed funds may be expected to have an active share between 0 and 20% next is tracking error, which measures the volatility of the difference in returns between the index and the Buffon measured in standard deviation.

The higher the tracking error, the more a funds returns are out of line with the index which suggests differences in portfolio construction to the index.

A very low tracking error might be indicative of a closet Index Fund.

The final measure is r squared also called the coefficient of determination. The r squared measure is derived from a linear regression of the indexes return against the returns of the fund.

The higher the r squared the more the movements in the funds performance are explained by the performance of the index.

A higher r squared would be indicative of a closet Index Fund.