HI

Does anyone have a spreadsheet and methodology to work out a tracking error - I ahve worked out a tracking difference but the calculation is to simplistic for the required information and looking on the net has opened up valleys of confusion!!!!!!!!!

Ola,

In terms of the calculation what are you trying to achieve as this may shed light on how to help. Essentially tracking error is the deviation of a fund from its benchmark. I would make sure you calculate it against the fund benchmark and not the stated sector benchmark as this maybe different, you might also find disparity in share class due to charges in different contracts which can also add confusion.

Also make sure you are comparing like for like performance figures.

Are you looking for specific funds or comparing a portfolio return / have you tried looking at R2 too / do you have any access to fund research software?

Cheers

MF

Hi,

Here are a few links with some useful pointers on both how to do it and what you can do instead of it if it is too complex (and it looks like it is for non-megamaths geeks!)

http://monevator.com/2011/01/18/trackin ... dden-cost/

http://monevator.com/2012/02/28/trackin ... easure-it/

http://moneyterms.co.uk/tracking-error/