S&P says costs and risk cause key disparities in index fund performance


You would think that an S&P 500 Index fund would be one of the easiest investments to own. But it turns out that choosing from among the many mutual funds that track the performance of stocks in the broader market is fraught with risks.

In theory, of course, picking an index fund should be pretty straightforward. After all, the name "index fund" implies that all it's supposed to do is mimic the results of an index. But Standard and Poor's Equity Research, whose parent company manages the S&P 500 Index, is warning investors that all index mutual funds are not the same.

Originally published