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The early attraction of S&P index funds: is perfect tracking performance an illusion?

John E. Cresson (Department of Marketing and Finance, College of Business and Technology, Southeastern Louisiana University, Hammond, LA 70402)
R. Mike Cudd (Department of Marketing and Finance, College of Business and Technology, Southeastern Louisiana University, Hammond, LA 70402)
Tom J. Lipscomb (Department of Marketing and Finance, College of Business and Technology, Southeastern Louisiana University, Hammond, LA 70402)

Managerial Finance

ISSN: 0307-4358

Article publication date: 1 July 2002

640

Abstract

Notes the popularity of index funds with US investors, refers to research on fund performance compared with indexes and presents a study comparing daily returns of S&P 500 index funds with the index itself. Explains the methodology and presents the results, which show that the funds “fall well short” of tracking the index efficiently; although larger funds and/or those with longer term managers have a better tracking performance. Considers consistency with other research and the implications of the findings.

Keywords

Citation

Cresson, J.E., Mike Cudd, R. and Lipscomb, T.J. (2002), "The early attraction of S&P index funds: is perfect tracking performance an illusion?", Managerial Finance, Vol. 28 No. 7, pp. 1-8. https://doi.org/10.1108/03074350210767933

Publisher

:

MCB UP Ltd

Copyright © 2002, MCB UP Limited

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