I’ve been watching this as it relates to the marketing of products. The “tracking error is bad” theme is still pretty entrenched overall at the advisor level (and for “unsophisticated” clients), but it pops up in a lot of ways and places that you wouldn’t expect even among “sophisticated” clients.

It will be interesting to see whether that philosophy changes over time across the business, and whether instead of using a screen that includes a maximum on tracking error people will start with a notion of a minimum threshold below which it’s not worth looking.

Tom Brakke