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1.5 1.7 Series1 Sector Index ~ ~ Market wide index Sector index 4.5 Fund size (mn) 100 1,000 10,000 Fee (%) Tr ac ki n g E rr o r (% ) Many trackers are cheap with low tracking errors. Note that the

characteristics of the stocks reported in Table 2. For example, stocks in the top tercile are more exposed to the market factor (high beta), negatively exposed to the size factor (large cap) and negatively exposed

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