https://v2.webnotes.in/tags/passive-funds/Recent content in Passive Funds on WebNotesHugoen-INMon, 18 May 2026 00:00:00 +0000https://v2.webnotes.in/tracking-error/Mon, 18 May 2026 00:00:00 +0000https://v2.webnotes.in/tracking-error/<p><strong>Tracking error</strong> measures the volatility of a passive fund&rsquo;s return deviation from its benchmark index, while <strong>tracking difference</strong> measures the average return deviation. Both are key quality metrics for <a href="https://v2.webnotes.in/index-fund-india/">index funds</a> and <a href="https://v2.webnotes.in/etf-india/">ETFs</a> .</p> <h2 id="formulas">Formulas</h2> <ul> <li><strong>Tracking difference</strong> = Average (Scheme return - Benchmark return) over period.</li> <li><strong>Tracking error</strong> = Standard deviation of (Scheme return - Benchmark return) over period.</li> </ul> <p>Both are typically expressed as annualised percentages.</p> <h2 id="typical-ranges">Typical ranges</h2> <p>For well-run Indian passive funds:</p>