First, choose a comparable return
A silver fund and a silver quotation are not automatically comparable. Identify the stated benchmark and whether it measures spot metal, futures or another exposure. Then align the currency, dates, valuation times and treatment of distributions. Use the fund’s net asset value, or NAV, return when assessing portfolio tracking. A share-price return answers a different question: what happened to a price at which shares could trade. Mismatched definitions can manufacture an apparent performance problem.
Tracking difference: the return gap
Define tracking difference here as fund return minus benchmark return over the same interval. If a hypothetical benchmark gains 10% and a fund’s NAV gains 9.4%, the difference is −0.6 percentage points. It is not a loss of 0.6% on the initial investment: both investments rose. Expenses and implementation can create a persistent gap. The size and causes depend on the structure, so a futures-based fund should be compared with its actual futures benchmark.
Tracking error: how much that gap varies
Tracking error measures the variability of periodic fund-minus-benchmark returns, commonly expressed as their annualised standard deviation. It needs a series of observations, not just one annual comparison. A fund could trail by a fairly steady amount and have low tracking error; another could alternate between outperformance and underperformance with greater variability. Check the provider’s frequency, window and annualisation method. Tracking difference describes the overall gap; tracking error describes the consistency of the relationship.
The market-price layer is separate
A premium or discount compares a share’s market price with its NAV per share at a particular time. That is different from either tracking measure. Its widening or narrowing can affect the investor’s realised return even when portfolio tracking changes little. The iShares Silver Trust disclosures, for example, distinguish market-price trading from NAV and explain that expenses reduce the silver value represented by shares. Read each layer separately: benchmark, portfolio return and the price actually paid.
Sources & further reading
Sources checked 14 November 2026. Reference organisations do not endorse this website. Price examples are hypothetical and educational.