Lesson 4: Tracking Error — How Close Is Close Enough? A good index fund is invisible against its benchmark. Here's how to measure it.
A fund promises to simply track the S&P 500. How close should it really stay?
Gut check before we measure the drift.
Assessment
A fund's whole job is to track the S&P 500 index. In a normal year, how close should its return be to the index's?
Its whole job is to copy 📈 How close is close?