Lost in the talk that index funds typically outperform actively managed mutual funds is the reality that index funds are also managed. When a buyout occurs or a rare debacle wipes a company out, indexing chiefs huddle to fill the vacancy. With more predictability, towards the end of the year the stocks that make up an index are evaluated to see if things need to be shuffled around to ensure relevance.

Last night, it was the popular Nasdaq 100 Composite's turn to rattle its constituency. Moving out are shares of ADC Telecommunications (NASDAQ:ADCT), Brocade Communications Systems (NASDAQ:BRCD), Ciena (NASDAQ:CIEN), Ericsson (NASDAQ:ERICY), Human Genome Sciences (NASDAQ:HGSI), Icos (NASDAQ:ICOS), Monster Worldwide (NASDAQ:MNST), and RF Micro Devices (NASDAQ:RFMD).

You were probably nodding your head at some of the names getting the boot. Ericsson is no Nokia (NYSE:NOK) in the wireless handset arena. Human Genome Sciences made strides in mapping the biotech-enabled future, but investor euphoria took a wrong turn and just kept going. Monster rode the online job-portal boom until Wall Street handed it a pink slip.

As a tech-intensive inn with room for 100 boarders, eight out means eight in. Replacing those names in the index a week from Monday will be Lam Research (NASDAQ:LRCX), Marvell Technology Group (NASDAQ:MRVL), ATI Technologies (NASDAQ:ATYT), Intersil (NASDAQ:ISIL), Level 3 Communications (NASDAQ:LVLT), Research In Motion (NASDAQ:RIMM), Career Education (NASDAQ:CECO), and Garmin (NASDAQ:GRMN).

They may not all be household words. Some may even appear surprising at first glance. Yes, ATI's origin lies in the dry business of computer graphics processors, but its recent forays in HDTV, video game consoles, and cell phone graphics are enticing. Research In Motion has excelled with its BlackBerry in ways that previous handheld devices have flunked out.

That doesn't mean one should take the index moves as buy or sell recommendations. Only fund families tied to the Nasdaq Composite and the Nasdaq 100 Trust (AMEX:QQQ) exchange-traded fund are obligated to follow suit. But as an investor, it would make for some enlightening due diligence to dig into the reasons that sealed the fate of these companies. What went right? What went wrong?

That way, maybe you'll be ahead of the game by buying into next year's additions -- and unloading the deletions -- a year early.

How do you feel about indexing? Is it an easy way to achieve equity diversification with leading companies, or will the right managed mutual funds treat you better? Is there more to telling a good index fund apart from a bad one than just annual expenses? All this and more -- in the Index Funds discussion board. Only on Fool.com.