[Verse 1] Sarah's portfolio beats the benchmark by two percent But her investors wonder if that's skill or accident Tracking error measures how much her returns deviate From the index she's following - volatility's debate Four percent tracking error means her bets spread wide While two percent means closer to the benchmark's ride [Chorus] Information ratio tells the tale Active return divided by tracking's scale Higher numbers mean the manager's bright Turning risk into reward just right Active share shows how different you are From the index - portfolios near and far [Verse 2] Michael's fund has information ratio of point-six That's decent skill, not just lucky tricks Active return of three percent annually earned Divided by tracking error of five - lesson learned The Sharpe ratio measures total risk and gain But information ratio shows active manager's brain [Chorus] Information ratio tells the tale Active return divided by tracking's scale Higher numbers mean the manager's bright Turning risk into reward just right Active share shows how different you are From the index - portfolios near and far [Bridge] Active share percentage shows portfolio's uniqueness Eighty percent means major departure's completeness Twenty percent means closet indexing's embrace Same holdings, different weights - hiding their true face Combine all three metrics for evaluation's power Tracking error, info ratio, active share each hour [Verse 3] Jenny's fund shows ninety percent active share score But information ratio's weak at point-two-four High tracking error with low active return Means her bold bets aren't helping investors earn Sometimes lower active share with higher info ratio Beats aggressive betting with poor portfolio [Chorus] Information ratio tells the tale Active return divided by tracking's scale Higher numbers mean the manager's bright Turning risk into reward just right Active share shows how different you are From the index - portfolios near and far [Outro] Three metrics combined reveal the manager's art Skill versus luck - now you can tell apart
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