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Performance results cannot be viewed in isolation. Portfolio returns and characteristics need to be compared to those of industry benchmarks that offer a yardstick by which to measure performance results. To perform these comparisons, INFORM offers a selection of over 500 industry indices.
An index or group of indices can be assigned to specific investment portfolios, so that the returns can be evaluated against particular market benchmarks. For example, comparing a small-cap portfolio to a small-cap benchmark.
Indices can also be blended to create custom-designed benchmarks. These can be matched against a portfolio that straddles styles, or can mirror a target asset allocation. Using INFORM, a custom benchmark can easily be constructed, such as:
50% S&P500 + 40% Lehman Aggregate + 10% 90-Day T-Bill = Custom Blend
INFORM enables clients to create such blended benchmarks and to match them to specific portfolios.
Finally, underlying characteristics are available through INFORM for most major indexes to add further contextual shading to an investment manager’s over- or under-performance.
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