Given the mandate of the ETF, which is to deliver exposure to the broad US market, and the ease of tax-efficient rebalancing within an ETF, the ETF will closely track the S&P 500 Index. AAUS is anticipated to have a tracking error of within 1% of the S&P 500 benchmark.
For the Exchange Fund, which operates under different portfolio constraints, we guide investors that our goal is an annualized tracking error of 2% to 4%, and we aim to improve upon the guidance with Index Sync.
Disclosures:
References to AAUS refer to Alpha Architect U.S Equity ETF, which is an ETF sponsored by Alpha Architect, LLC. The fund's investment advisor is ETF Architect. All investments will be selected based on alignment with the Fund’s stated investment strategy and objectives. Cache and Alpha Architect are separate, unaffiliated companies. For more information about Alpha Architect and their funds, please visit: https://funds.alphaarchitect.com/
Cache primarily seeks to achieve its investment objectives by constructing a diversified portfolio of equity securities that reflect the risk and return characteristics of a broad-based index. The Fund also invests in Qualifying Assets, as defined in greater detail in the offering document; these investments may include real estate, private funds, or other investments consistent with Exchange Fund requirements. Tracking error targets are goals set by the Cache Exchange Fund; however, there is no guarantee they will be able to achieve this objective.