The paperpoints out the designindex, sets upmathematicalmodel and optimizesthe relevantparameter with reference to the featureof the ranging mechanism.
The expectation that an index fund will get EXACTLY the return of the target indexsets the stage for an interesting problem: Zero tracking error is achievable, but it comes at a very high price.
Particularly at this point in the cycle, replicating the index closes off entire sets of opportunities to investors, inhibits diversification and may magnify risks.
The exclusion of financials sets the index apart, as does the inclusion of companies that are not US-based (the Dow Jones Industrial Average for instance only covers companies based in the United States).