Hedge Fund Tracking Error
Contents |
Center Retirement Personal Finance Trading Q4 Special Report Small Business Back to School Reference Dictionary Term Of The Day Expatriation Tax An expatriation tax is a tax on someone who renounces their tracking error information ratio citizenship. In the United ... Read More » Latest Videos How Much tracking error calculation Should I Save for Retirement? The Bully Pulpit: PAGES Guides Stock Basics Economics Basics Options Basics
Tracking Error Interpretation
Exam Prep Series 7 Exam CFA Level 1 Series 65 Exam Simulator Stock Simulator Trade with a starting balance of $100,000 and zero risk! FX Trader Trade the Forex market risk
Negative Tracking Error
free using our free Forex trading simulator. Advisor Insights Newsletters Site Log In Advisor Insights Log In Tracking Error Loading the player... What is a 'Tracking Error' Tracking error is the divergence between the price behavior of a position or a portfolio and the price behavior of a benchmark. This is often in the context of a hedge or mutual fund tracking error volatility that did not work as effectively as intended, creating an unexpected profit or loss instead.Tracking error is reported as a standard deviation percentage difference, which reports the difference between the return an investor receives and that of the benchmark he was attempting to imitate. BREAKING DOWN 'Tracking Error' Since portfolio risk is often measured against a benchmark, tracking error is a commonly used metric to gauge how well an investment is performing. Tracking error shows an investment's consistency versus a benchmark over a given period of time. Even portfolios that are perfectly indexed against a benchmark behave differently than the benchmark, even though this difference on a day-to-day, quarter-to-quarter or year-to-year basis may be ever so slight. Tracking error is used to quantify this difference.Calculation of Tracking ErrorTracking error is the standard deviation of the difference between the returns of an investment and its benchmark. Given a sequence of returns for an investment or portfolio and its benchmark, tracking error is calculated as follows:Tracking Error = Standard Deviation of (P - B).For example, assume that there is a large cap mutual fund that is benchmarked to the Standard and Poor's (S&P) 500 index. Next, assume that the mutual fund and the index realized the follo
Funds Money Managers Plan Sponsors Reference MaterialsArticles Concepts Statistics StatFACTS Links Conference Materials Dynamic Text Client ResourcesTraining/SupportRegional Training New User Online Training Weekly Online Training
Tracking Error Formula Cfa
Template Library Guides Help VideosOnline Tutorials Quick Tip Videos DownloadsData tracking error etf Updates Software Beta Installs WebEx E-mail: * Password: * Remember me Request new password tracking error control systems Updates Contact Us Site Map Home Reference Materials Articles Concepts Statistics StatFACTS Links Conference Materials Dynamic Text Contact Us Request More Information Complimentary Investment Analysis http://www.investopedia.com/terms/t/trackingerror.asp Schedule Web Demo Tracking Error Also known as the standard deviation of excess returns, tracking error measures how consistently a manager outperforms or underperforms the benchmark. PDF version: StatFacts_Tracking_Error.pdf How Is it Useful? Tracking error measures the consistency of excess returns. It is created by taking the difference between the manager return and http://www.styleadvisor.com/resources/statfacts/tracking-error the benchmark return every month or quarter and then calculating how volatile that difference is. Tracking error is also useful in determining just how “active” a manager’s strategy is. The lower the tracking error, the closer the manager follows the benchmark. The higher the tracking error, the more the manager deviates from the benchmark. What Is a Good Number? A good tracking error depends upon investor preference. If the investor believes markets are efficient and that it is difficult for active managers to consistently add value, then that investor would prefer a lower tracking error. Alternatively, if the investor believes that smart active managers can add significant value and should not be “tied down” to a benchmark, the investor would tolerate higher levels of tracking error. What Are the Limitations? Tracking error cuts both ways, measuring both periods of outperformance and underperformance versus the benchmark. An investor would prefer high tracking error if there was a high
checks, and to our use of cookies as described in our Cookie Policy. Do not show again DOW JONES, A NEWS http://www.wsj.com/articles/SB10001424052702303734204577466453629079534 CORP COMPANY News Corp is a network of leading companies in the worlds of diversified media, news, education, and information services. DOW JONES Barron's BigCharts DJX Dow Jones Newswires Factiva Financial News Mansion Global MarketWatch Newsmart NewsPlus Private Markets Risk & Compliance WSJ.com WSJ Pro WSJ Conference WSJ Video NEWS CORP Big Decisions Business Spectator Checkout51 Harper Collins New York Post PropTiger REA realtor.com tracking error Storyful The Australian The Sun The Times DJIA Futures ▲ 18044 -0.08% S&P 500 F ▲ 2125.00 -0.09% Stoxx 600 ▲ 338.28 -0.49% U.S. 10 Yr ▲ 6/32 yield 1.779% Crude Oil ▲ 50.45 0.20% Euro ▲ 1.1002 0.28% Subscribe Now Sign In The Wall Street Journal Sections My Journal Home World U.S. Politics Economy Business Tech Markets Opinion hedge fund tracking Arts Life Real Estate Today's Paper SHOW ALL SECTIONS HIDE ALL SECTIONS World Home Africa Asia Canada China Europe Latin America Middle East Brussels Real Time China Real Time India Real Time Economy World Video U.S. Home Economy Law New York Politics Real Time Economics The Numbers Washington Wire Journal Report U.S. Video What's News Podcast Politics Home Think Tank Washington Wire Politics Video WSJ/NBC News Poll Economy Home Real Time Economics Economic Forecasting Survey Economy Video Business Home Management Tech/WSJ.D Aerospace & Defense Autos & Transportation Commercial Real Estate Consumer Products Energy Entrepreneurship Financial Services Food & Services Health Care Hospitality Law Manufacturing Media & Marketing Natural Resources Retail CFO Journal CIO Journal CMO Today Logistics Report Risk & Compliance Bankruptcy Beat Heard on the Street Business Video Journal Report Business Podcast Tech Home CIO Journal E-Commerce Mobile Personal Tech Privacy & Security Startups Christopher Mims Geoffrey Fowler Joanna Stern Personal Tech News Venture Capital Dispatch Billion Dollar Startup Club Tech Trader Daily Tech Video The Accelerators Tech Podcast Markets Home Bonds Commercial Real Estate Commodities & Futures Currencies Deals Financial Services Funds Stocks Your Money Heard on the Stre