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The return of the ETF is only as good as what the portfolio managers can accomplish in reality. They are very good at this, but the cost is there. It's referred
by kevinpet 10y ago
The return of the ETF is only as good as what the portfolio managers can accomplish in reality. They are very good at this, but the cost is there. It's referred to as tracking error.
- kgwgk 10y agoThe tracking error is not really "a cost", it's about variability. An ETF can have low tracking error but high cost if the returns are highly correlated with the index but systematically lower. http://www.etf.com/etf-education-center/21030-understanding-tracking-difference-and-tracking-error.html http://www.etf.com/etf-education-center/21030-understanding-...