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Tracking error

How much a scheme's returns have wandered from its benchmark's, month to month.

Formula

TE = standard deviation of (r_fund − r_benchmark) monthly × √12

How to read it

For index funds and ETFs, lower tracking error means the scheme followed its index more closely. For active funds, tracking error simply measures how different the scheme is from the benchmark.

Limitations

MFIC uses an index-fund NAV as the benchmark proxy, so tracking error for an index fund is measured against another index fund, not the official index.

Tracking error by category today

Spread of tracking error across Regular-plan schemes in each category, calculated by MFIC from AMFI NAVs as of 1 Oct 2026. The middle half of schemes falls between the 25th and 75th percentiles.

Category (Regular plans)	Schemes	25th percentile	Median	75th percentile
Large Cap	32	2.6%	3.2%	4.1%
Large & Mid Cap	26	3.5%	4.4%	4.8%
Flexi Cap	36	3.6%	4.5%	6.3%
Multi Cap	23	4.3%	4.8%	5.6%
Mid Cap	29	4.0%	4.7%	5.8%
Small Cap	24	5.7%	6.5%	6.9%
ELSS	38	3.4%	4.3%	5.7%
Focused	27	4.1%	5.1%	6.0%
Value	21	3.4%	4.0%	5.3%

Use it in MFIC

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Disclosure. Educational content. Figures are historical calculations from AMFI NAV data and may differ from other sources because of methodology. Past performance does not guarantee future results. Mutual fund investments are subject to market risks; read all scheme-related documents carefully. Integrato Financial Services Pvt. Ltd. is an AMFI-registered Mutual Fund Distributor (ARN-173155); this page is not investment advice. Questions? Book a consultation.