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 Tracking Error Calculations 
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Joined: 10 Jan 2012 10:30
Posts: 1
Post Tracking Error Calculations

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!!!!!!!!!

07 Mar 2012 11:56

Joined: 04 Feb 2009 23:24
Posts: 129
Post Re: Tracking Error Calculations

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?



09 Mar 2012 16:00

Joined: 07 Dec 2010 22:02
Posts: 86
Post Re: Tracking Error Calculations

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!) ... dden-cost/ ... easure-it/

Benjamin Fabi
I am a pension transfer specialist. I have been and continue to be a paraplanner. I have also worked for O&M systems and the Financial Ombudsman Service.

29 Mar 2012 22:13
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