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Do indexes tracking the same asset class have the same returns?

An index fund is a type of mutual fund or ETF designed to track an index or list of stocks. They are passive investments, meaning portfolio managers are not actively buying and selling securities in the funds except for on a handful of predetermined dates, and generally give you a return very close to its benchmark. Because of the above, people may assume that indexes in the same asset class would have similar returns. In reality, however, different index providers (even within the same asset class) can have very different methodologies which can lead to significant differences in performance. Three of the most common small cap value indexes, for example, are the Russell 2000 Value, the S&P SmallCap 600 Value and the CRSP US Small Cap Value. Each one of these indexes has a different set of criteria for index construction, including different eligible securities, different portfolio rebalance dates, and different ways they handle corporate actions. (download the PDF for more)

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