PT  - JOURNAL ARTICLE
AU  - David E. Kuenzi
TI  - Strategy Benchmarks
AID  - 10.3905/jpm.2003.319872
DP  - 2003 Jan 31
TA  - The Journal of Portfolio Management
PG  - 46--56
VI  - 29
IP  - 2
4099  - https://pm-research.com/content/29/2/46.short
4100  - https://pm-research.com/content/29/2/46.full
AB  - As the investment management industry becomes more sophisticated, investment managers have come to use benchmark indexes in an increasingly complex fashion: as a baseline along which the manager intends to add value and manage risk; for determining which factor bets have most influenced overall portfolio returns (attribution analysis); and for determining the extent to which the manager adds value (through use of the information ratio, for instance). Managers typically use readily available published indexes for these purposes, although these indexes often do not accurately reflect the manager's true investment universe, and thus give rise to distortions and consequently poor information. “Strategy benchmarks” are often beneficial alternatives from the perspectives of client, consultant, and investment manager.