Why do you manage against a benchmark?
Benchmarks are often used in institutional accounts as a tool to help evaluate the skill of the portfolio manager. Without having some guide or benchmark, it is extremely difficult to judge whether the manager is adding value through skillful security selection or not. If not, it is generally far cheaper, and less risky, for an investor to use an index fund.
Benchmarks are often used in institutional accounts as a tool to help evaluate the skill of the portfolio manager. Without having some guide or benchmark, it is extremely difficult to judge whether the manager is adding value through skillful security selection or not. If not, it is generally far cheaper, and less risky, for an investor to use an index fund.
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