how to minimize tracking error

Discussion in 'Trading' started by emk662, Aug 14, 2007.

  1. emk662

    emk662

    I think I need to build a portfolio simulating DJIA index. How to minimize the tracking error? Your help will be greatly appreciated.
     
  2. ?.....buy the DOW-Diamonds, the Dow futures contract(s) and/or the 30 underlying components of the index.
     
  3. Beast84

    Beast84


    ^^^^^^Exactly
     
  4. dtan1e

    dtan1e

    replicate 95% of the holdings in the dow, or even better everything => index hugging :D