Fidelity

Definition

In the context of securities markets, fidelity refers to the degree to which a financial instrument or investment strategy accurately replicates the performance or characteristics of a particular benchmark or index. It measures the consistency and reliability with which an investment follows its designated path or mandate.

Related terms

Benchmark: A standard or point of reference against which the performance of a security, portfolio, or investment manager can be measured.

Index Fund: A type of mutual fund with a portfolio constructed to match or track the components of a market index, offering high fidelity to its referenced index.

Tracking Error: The discrepancy between the performance of an investment portfolio and its benchmark, indicating fidelity levels