Tag
#tracking-error
5 articles
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Active Share Explained: How Different Is a Fund From Its Index?
Active share measures the percentage of a fund's holdings that differ from its benchmark index. Here is the formula in words, how to read it, and what it cannot tell you.
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Benchmark Selection for Portfolios: How the Wrong Benchmark Invents Alpha
Choosing a benchmark is not administrative. The benchmark defines what counts as skill, so a mismatched one manufactures alpha or hides it. Here is how to select one properly.
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Index Funds vs ETFs in India: Structure, Tracking and Costs
Index funds and ETFs can track the same index but differ in how you transact, how price relates to NAV, what you pay, and where tracking difference comes from.
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What Is the Information Ratio? Active Return per Unit of Tracking Error
The information ratio divides a portfolio's return above its benchmark by the volatility of that difference. It measures consistency of outperformance, not its size.
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What Is Tracking Error? How Far a Portfolio Drifts From Its Benchmark
Tracking error measures how much a portfolio's returns vary from its benchmark's returns. It is the standard deviation of the return difference, usually stated per year.
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