Sentences with phrase «tracking error»

Last year, 54 ETFs showed tracking errors of more than three percentage points, up from just four funds the prior year.

In a previous post, I pointed out that many international equity ETFs showed large tracking errors in 2009.

Of course, index funds and ETFs with low management fees have much smaller obstacles to overcome, so they tend to have lower tracking errors as a result.

There can be large tracking errors when holding leveraged ETFs on a longer term basis.

High tracking error volatility indicates a high degree of active management.

It is no surprise to us that there is a corresponding increase in tracking errors for ETFs tracking an index in another time zone, largely due to the bid - ask spread.

A perfect example is the series of recent posts on tracking error in exchange - traded funds (a must - read for ETF investors).

Any deviation of returns of index fund or ETF from the returns of underlying total return index is known as tracking error.

They therefore hold too many positions they don't find especially attractive, simply because these stocks provide diversification and reduced tracking error relative to their benchmark index.

It has positive tracking errors over 1, 3 and 5 years and since inception!

This also preserves balanced diversification, maintains a higher degree of the percent of assets invested in the market and helps reduce tracking error in the performance of the fund / account.

This section underscores the importance of assessing fees, liquidity and tracking error when making index ETF selections.

That helps explain the larger - than - expected tracking error on foreign equity ETFs.

One such method, tracking error volatility, measures the standard deviation of the difference between a manager's returns and the index returns.

Bottom line: Bond ETFs do have portfolio managers, and a skilled one will work to minimize tracking error on an ongoing basis so that investors get the exposure they're seeking.

With single factor products there, you should have a pretty significant tracking error.

This may not be a huge deal just yet but eventually, there is bound to be tracking error from the underlying index that most investors are likely unaware of.

Less tracking error means you have a better, more reliable product.

The fund makes for an interesting exchange - traded fund in that it has one of the worst tracking errors in the business.

The difference in the performance of an index fund vs. its benchmark is called tracking error.

The strategy is a trade - off — increasing tracking error, but lowering costs — and over the long term it should even out.

How much tracking error is there from the underlying index?

We've made sure our All - Stars have a good record of keeping tracking errors low.

If a manager tracks a benchmark perfectly, then tracking error will be zero.

If tracking error and capital losses aren't risks, what about volatility?

The term tracking error is defined as the deviation of the performance of an index fund or exchange - traded fund (ETF) from the performance of the index it tracks.

Yes that is a huge tracking error, * in your favor *.

Depending upon cost and efficiency of fund management, fund may generate positive or negative tracking error.

It seems reasonable to expect the funds tracking error to improve in the future.

To make sure you understand these numbers in their proper context, see yesterday's post about tracking errors on Canadian equity ETFs.

When there is an index change in the middle of the year, measuring tracking error becomes difficult and the numbers can be misleading.

BTW, tracking errors appear in other places besides ETFs.

Is there consistent tracking error due to changes in fees or tax treatment?

All these effects add up to a 1.5 % per year tracking error.

Or do you end up paying the same FX transactions fees indirectly through tracking error anyways?

I don't know why the observed tracking error is twice as much.

It's not tracking error and it's not a mistake when you lose money in one of these while the underlying benchmark is flat.

There are also tracking errors and ETF trade spreads to consider.

Test and simulation results show that the measuring accuracy and automation level of novel AM tracking error testing approach meet the requirements of test measurement.

We believe that these factors are a key risk consideration when constructing a portfolio as opposed to only looking at returns based volatility measures (i.e. tracking error).

The key point here is that if your ETF happened to show a large tracking error recently, that's not necessarily a reason to abandon it.

The idea of maximizing the excess return - vs - tracking error relationship takes a backseat to not losing 30 %, 40 %, or 50 % of your wealth.

When building a portfolio, multiple levels of risk control are employed with the objective of achieving alpha with the lowest possible tracking error.

It has closely tracked the underlying index over the last three years with high correlation and low tracking error statistics compared to its peers.

Look to own those with the lowest underlying tracking error, which is the standard deviation of an ETF's returns from those of the benchmark.

If you make the assumption that the sequence of return differences is normally distributed, you can interpret tracking error in a very meaningful way.

The PM of the ETF is constantly working to reduce portfolio tracking error vs. the fund's index.

I didn't realize the staggering difference in tracking errors until you pointed it out.