Index Quality
iShares believes that quality ETFs must track quality indexes. We work closely with well-known, trusted index providers to design ETFs that follow thoughtfully constructed, transparent market indexes. With representation on all of the major index committees, both domestic and international, we have firsthand insight into construction methodologies and work closely with providers to monitor and help enhance index quality over time. By focusing heavily on index quality, we believe we can create ETFs that offer investors diversified, broad exposure to specific asset classes, markets or sectors.
FAQ
- Q. Why are the index level values available in the Tracking Error Chart different from other sources?
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A.
Most indexes provide a price and total return index level, and different sources use different values. iShares.ca uses total return index levels (return net of taxes).
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- Q. What does tracking error measure?
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A.
It's a common misconception that tracking error (or active risk) measures a difference in performance. In actuality, it is the annualized standard deviation of the monthly difference between portfolio return and benchmark return.
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