Janus suggests approach to limit tracking error without constraining excess returns

A moderate tracking error is an important criterion for some pension fund sponsors, but how one constrains that tracking error is crucial. It’s far more effective for fundamental active managers to control tracking error as the outcome of an investment process rather than as an input into the process. Janus Capital Group suggests a way to construct a portfolio that allows fundamental, active managers to take moderate risk and focus on their stock-picking skills. A solutionManagers …