How we measure a fund against its benchmark

01 · Active share

Difference is not skill

Active share is the portion of a fund portfolio that differs from a benchmark portfolio. A result of 70% means 70% of the two portfolios does not overlap at the measured weights on that as-of date.

Active share can’t tell you whether the active bets were good—only that they exist. It does not measure future returns, manager skill, risk, or whether the fee was worth paying.

02 · Benchmark rule

The fund gets the most charitable comparison

We calculate active share against 8 index portfolios and publish the lowest result as the best-fit headline. Each index portfolio uses weights from the ETF’s filed N-PORT holdings nearest the fund’s fiscal-quarter date.

We also calculate active share against the benchmark named in the fund’s prospectus and show that number beside the best-fit result. When the declared benchmark and best fit disagree, the registry marks the row “benchmark mismatch.”

Best-fit can understate activeness for funds that genuinely straddle styles—the mismatch flag exists for exactly that case. The lowest result is conservative, but it is not proof that the best-fit index describes the manager’s mandate.

03 · Portfolio filters

What enters the comparison changes the answer

The comparison includes long common equity. It excludes preferred shares and derivative overlays. The Phase 1 evidence review dated July 25, 2026 recorded that those exclusions shifted the comparison base by up to roughly 5.5% in its validation sample. That observed limit is not a forecast for the registry; each fund’s excluded weight must stand on its own filing.

We collapse dual classes to the issuer level with a curated map, including Berkshire Hathaway and Alphabet share classes. A manager does not earn active share merely by holding a different class of the same issuer. Funds-of-funds stay outside the registry because comparing their wrapper holdings with direct equity weights would mix two different portfolio levels.

These filters make common-equity comparisons more consistent, but they can hide risk or exposure created by excluded preferreds and derivatives. Read active share as a long-common-equity measure, not a complete account of the fund.

04 · Filing delay

The fund has traded since the snapshot

The Phase 1 evidence review dated July 25, 2026 records that fund holdings filings can arrive up to roughly 60 days after quarter end. Each registry figure therefore shows the as-of date from the underlying filing, not the date a reader opens the page.

The portfolio may have changed before the figure appears. Stale is acceptable; undisclosed stale never is.

05 · Fee metrics

Filed fees, divided by measured difference

Net expense ratios come from the risk/return summary in the fund’s filed prospectus data. Marketing pages are not a fee source.

Fee per active unit divides the filed net expense ratio by best-fit active share. A 1.00% expense ratio divided by 50% active share equals 0.02 percentage points of annual fee for each percentage point of measured active share. It is a comparison unit, not a second fee charged to an investor.

When best-fit active share is below 5.0%, we suppress the quotient and label it “Not meaningful — index-tracking portfolio (active share under 5%).” This is a measurement boundary, not a missing filing.

A lower ratio does not make a fund better, and a higher ratio does not prove poor management. The measure cannot value the active decisions. Dollar fee-drag illustrations use the version 1.1 assumptions below and do not measure whether the fund’s decisions justified its fee.

06 · Record policy

Published marks are append-only

A published as-of mark is never rewritten. A later filing creates a later mark. If we confirm an error, the correction appends to the record and this changelog identifies what changed; it does not erase the original observation.

Each verification URL resolves to the record for that as-of date. A current registry page may show a newer filing, but its older verification URL remains a citation for the older mark.

Append-only history preserves mistakes as well as correct results. The correction record is part of the evidence readers need to judge either one.

07 · Fee-drag illustrations

The difference between two fixed fee rates

Each illustration starts with $100,000, applies a 5% annual return, compounds annually, and deducts the filed expense ratio once per year as a reduction of return. The 5% rate is the comparison convention required by the SEC’s Form N-1A fee-example instructions, not our estimate of future performance.

The calculator reports ending value at the fund class’s filed net expense ratio, ending value at the baseline, and the difference. The baseline is the lowest filed expense ratio among the registry’s versioned index-fund controls and is recomputed when the registry snapshot changes. The current baseline is0.00%. Static tables use 10, 20, and 30 years; the calculator allows 1–50 years.

The current 0.00% baseline is supported by FCFMX, filed expense period 2026-04-30; TEQWX, filed expense period 2025-10-31; FZROX, filed expense period 2025-12-31.

The arithmetic holds returns and expense ratios fixed. Actual returns and fees change, taxes and cash flows are omitted, and the result is not a prediction or personalized advice. A smaller illustrated difference does not establish that a fund is suitable or that its portfolio decisions were successful.

08 · Changelog

Method changes remain visible

A future methodology change appends here with its version and date. It does not silently alter the meaning of a previously published mark.