Benchmark
Have you ever had trouble finding the appropriate benchmark for a product?
Are you ever unsure what benchmark to use for a specific product? Several times we get the question as to which benchmark would be appropriate or the "correct" benchmark to run versus a manager. Well, we have a few solutions for you within StyleADVISOR:
- Manually add the Market Benchmark and look at specific benchmark relative statistics such as R-Squared, Tracking Error, etc.
- Run Returns-Based Style Analysis to build a blended benchmark
More information about this topic:
Benchmarks
At the heart of a quality manager analysis is a good benchmark. According to AIMR, in order for a benchmark to be a valid and effective tool for measuring a manager’s performance, it must be unambiguous, investable, measurable, appropriate, reflective of current investment opinions and specified in advance. A benchmark with all of these characteristics is the “style benchmark,” which is explained in this article.