tracking error

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Tracking error

In an indexing strategy, the standard deviation of the difference between the performance of the benchmark and the replicating portfolio.

Tracking Error

An excessive deviation between an investment or portfolio and some benchmark. It is commonly used with respect to mutual funds, hedges, or other investment vehicles designed to track some index or other benchmark. If the portfolio's performance falls short of the benchmark, especially by a large amount, there is said to be a tracking error; an investor or investment company may wish to re-evaluate how it puts together the portfolio.

tracking error

The difference in the return earned by a portfolio and the return earned by the benchmark against which the portfolio is constructed. For example, if a bond portfolio earns a return of 5.15% during a period when the portfolio's benchmark (say, for example, the Lehman Brothers Index) produces a return of 5.06%, the tracking error is .09%, or 9 basis points.
References in periodicals archive ?
Monitor Tracking Errors -- Advisors should not overlook the tracking error -- which is the risk that an ETF's price might not match the fund's benchmark.
He pinpointed 18 critical rider training and tracking errors and provided fixes, making 1 them 100 percent compliant with AF standards.
The Dotmatics Inventory module eliminates tracking errors and inconsistencies associated with traditional paper inventories and it optimises the use of resources leading to a more efficient research organisation.
8220;By minimizing XY tracking errors and reducing feature location set-up time, ContourGT-I enables gage-capable 'measurement on demand.
r] have the form of Equation (14) and the corresponding predicted tracking errors are given by Equation (15).
Treasury indexes that rebalance daily offer the advantages of reduced tracking errors when rebalancing portfolios and provide a more accurate reflection of current market conditions.
Pre-labeled slides, plates, tubes, vials, and containers are sequentially ordered to eliminate tracking errors or duplicates, and the labels can be permanently affixed to surfaces to guarantee performance in harsh environments.
Cross-validation with other metering equipment is likewise improved, preventing tracking errors that can arise with less precise repeatabilities.
The tracking errors for WCL are far greater, the maximum exceeding 3%, while the mean error is around 1.
Mirtazapine 30 mg was associated with an increase in weaving and an increase in tracking errors on the divided attention test, compared with escitalopram and placebo.
Quality Advantage mandates documenting all tasks, quickly tracking errors and expeditiously performing follow-up corrective measures.