We use cookies to improve site performance and enhance your user experience. If you'd like to disable cookies on this device, please see our cookie management page.
If you close this message or continue to use this site, you consent to our use of cookies on this devise in accordance with our cookie policy, unless you disable them.

Close

registration required

or
for more website access

This content can only be viewed by subscribers and registered users of Investors Chronicle.

Subscribe or register free today

The numbers some ETFs don't want you to see

You wouldn't buy a fund without considering fees, but failure to inspect the tracking difference of an exchange traded fund (ETF) could be just as severe an oversight.

Tracking difference looks at the overall difference between the ETF's performance and the performance of the index that it aims to replicate over a particular period. When examining charges, you know it will have a direct drag on the performance of your investment, and negative tracking difference, ie the ETF underperforming its index, has the exact same impact on performance.

So, particularly if you're a long-term investor, tracking difference is as important as the fees you pay to be in the fund. You won't know the total costs of buying it if you can't see the tracking difference, so, in other words, checking tracking difference is essential.

registration required

visible-status-Standard story-url-Look our for ETF tracking difference.xml

By Katie Morley,
15 February 2013

Print this article
Comments

Register today and get...

Register today and get...
Please note terms & conditions apply