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Fund Spy

Sorting the Rebels From the Conformists

Tracking error helps you set expectations.

Mentioned: , , , , , , , , ,

This article originally appeared in the February issue of Morningstar FundInvestor.

Does your fund have a surprise in store? Tracking error might give you the answer. Tracking error is a favorite measure of the investment industry. It measures the volatility of a fund that is not explained by the fund's index. In other words, it measures how much a fund's returns have varied from the index's.

Russel Kinnel has a position in the following securities mentioned above: FBNRX, TPINX. Find out about Morningstar’s editorial policies.