Is active risk the same as volatility?

No. Volatility measures how much the fund's own return swings in absolute terms. Active risk measures how much the difference between the fund's and the index's return swings. A fund can have high volatility but low active risk if it swings in step with an already volatile index.

Why is the measure called both active risk and tracking error?

Tracking error is the English term and still the most common in the industry. Active risk is its Swedish equivalent, used increasingly as more investors ask for understandable Swedish terminology.

How often is Amos Value's active risk updated?

The figure on this page is recalculated continuously from the fund's actual NAV history and always refers to the most recently completed calendar month, the same period as in the latest monthly report to unitholders.

Glossary

Active risk

How much a fund's return has historically swung relative to its benchmark index, regardless of direction. Also called tracking error.

What it is

The swing against the index, not against zero

Active risk is calculated as the standard deviation of the difference between the fund's and the index's daily returns, annualized. It captures how much the fund deviates from the index in either direction, not whether the deviation has been for the better or the worse. Active risk near zero means the fund effectively tracks the index. High active risk means the fund's result can look very different from the index's, year to year.

Active risk below 3 percent: As a common rule of thumb, the fund is approaching a closet index fund, one that resembles its index despite an active fee.
Active risk above 3 percent: The fund is managed actively enough that its result can realistically differ from the index, in either direction.
Active risk is not the same as active share: Active risk measures the return's swings over time, active share measures the portfolio's composition at a given point in time. A fund can have high active share but still low active risk.

In practice

A measure the law requires, but rarely shows

Fund companies are required to disclose active risk in the annual report and the information brochure, and the figure must be made available on the company's website. The law sets no requirements on where or how accessibly the measure is shown, however, which means it often ends up buried in a quarterly document rather than on the fund's own page. Active risk also says nothing about whether the deviation from the index has been profitable, only that it has existed.

Amos Value's active risk versus SIXPRX in August 2026

6.3%^*

* Based on the fund's history since inception (July 6, 2026), not the usual 12-month window. Can fluctuate more than a figure based on longer history.

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“We follow our process slavishly. We will make mistakes, but not because we deviated.”

Amos Fonder

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Common questions about active risk

Related concepts

Glossary

Alpha

The return a portfolio has delivered beyond what its market risk and the risk-free rate can explain, according to the CAPM financial model.

Information ratio

How much excess return a portfolio has delivered against its benchmark, set in relation to how much it deviated to get there.

Effective number of assets

A concentration measure showing how many equally-weighted holdings a portfolio is equivalent to, regardless of how many companies it actually owns.

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