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Is the Index affected by survivorship bias?

April 26, 2017affected index survivorship

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Is the Index affected by survivorship bias?

2 Answers

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Most indices are affected by some form of survivorship bias. In order to minimize this effect, the Index does not remove funds in the process of liquidation, and therefore captures all of the potential negative performance before a fund ceases to operate.

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Most indexes are affected by some form of survivorship bias. In order to minimize this effect, the index does not remove funds in the process of liquidation, and therefore captures all of the potential negative performance before a fund ceases to operate.