A Simple Guide to Tracking Error

Do you know why tracking error is important? It offers more than a simple measurement of portfolio versus benchmark performance. We explain how it should be used to establish benchmark-relative performance expectations and the differences between realized versus predicted tracking error.

Investment advisory services offered through Parametric Portfolio Associates^® LLC ("Parametric"), an investment adviser registered with the U.S. Securities and Exchange Commission. Parametric (National Registration Database No. 42850) is also registered as a Portfolio Manager with the securities regulatory authorities in certain provinces of Canada with regard to specific products and strategies. Parametric provides advisory services directly to institutional investors and indirectly to individual investors through financial intermediaries. The information on this website does not constitute an offer to sell, or a solicitation of an offer to purchase, securities in any jurisdiction to any person to whom it is not lawful to make such an offer. Investing entails risks and there can be no assurance that Parametric (and its affiliates) will achieve profits or avoid incurring losses. All investments are subject to potential loss of principal. Parametric does not provide tax or legal advice. Prospective investors should consult with a tax or legal advisor before making any investment decision. Please refer to the Disclosure page for important information about investments and risks.

© 2018 Parametric Portfolio Associates^® LLC. All rights reserved. 1918 Eighth Avenue, Suite 3100, Seattle, WA 98101.

A Simple Guide to Tracking Error

Is High Tracking Error a Bad Thing?

The Value of Tax Alpha

Benchmarking After-Tax Performance