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benchmarks

Derf
edited February 2012 in Fund Discussions
I was thinking about this earlier today & thought I'd bring it up for discussion.
1. How close should your mf follow it's benchmark ?
2. What peroid of time should be allowed to smooth out the bumps? 6 months, 1 year, or more?
3. At what point do you look for another benchmark ?
4. I believe WSJ gives a quarter review of the averages for different sectors, LC - SMCV-etc.. Would this be better than what the mf offers for a benchmark?

Thanks to all that reply.

Have a good weekend, Derf

Comments

  • David_Snowball
    Hi, Derf.

    The other term for "following its benchmark" is "hugging an index."

    Perhaps the question is "is the fund manager doing what I hired him or her to do?" Several of my income-oriented funds (HSTRX, RPSIX, RPHYX) are supposed to generate mid-single-digits returns, consistently, with limited volatility. As long as they're doing that, I'm not so worried about their R-squared.

    Just a thought,

    David
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