[Verse 1] Sarah runs a portfolio, trying to beat the market high But how do we measure if her picks can really fly Three metrics hold the key to judge her active skill Tracking error, information ratio, and active share fill the bill [Chorus] Track the error, see the variance Information ratio shows your guidance Active share reveals how different you are These three metrics make you a CFA star TEA time metrics, remember with ease Tracking, Error, Active - master all three [Verse 2] Tracking error measures how much your returns deviate From your benchmark index, it's the standard deviation rate When returns swing wildly from the market's steady beat Higher tracking error means more risk you'll meet [Chorus] Track the error, see the variance Information ratio shows your guidance Active share reveals how different you are These three metrics make you a CFA star TEA time metrics, remember with ease Tracking, Error, Active - master all three [Verse 3] Information ratio takes your excess return Divides by tracking error, here's what you learn Higher ratios mean you're adding value well Better risk-adjusted returns, your story they tell [Bridge] Active share percentage shows your true conviction How much you differ from index composition Zero means you copy, one hundred means unique Find that sweet spot that makes performance peak [Chorus] Track the error, see the variance Information ratio shows your guidance Active share reveals how different you are These three metrics make you a CFA star TEA time metrics, remember with ease Tracking, Error, Active - master all three [Outro] When you're evaluating managers, don't just look at return These three metrics help you understand and learn Active management skill requires deeper sight TEA time metrics make your analysis right
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