A recent article from InvestmentNews indicates that the tracking errors of exchanged-traded products (ETPs) are on the rise. (Tracking error is a measure of how well an ETP matches its underlying index.) An Alpholio user might therefore be concerned with the effects of this trend on the results of our analyses of mutual funds and investment portfolios. There is actually no impact: In all its analyses, Alpholio always uses real (market) returns of both the analyzed and reference instruments instead of artificial (and hence practically unrealizable) indices. Therefore, in this context the tracking error is immaterial, as is the actual index the ETP decides to track.

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