Constructing Peer Benchmarks for Mutual Funds: A Style Analysis-Based Approach

摘要

Evaluating the investment strategy and performance of mutual funds is increasingly important in light of the continued growth in their number and the intense competition among them for new capital. The most common approach relies on classifying funds into one of several style categories based on their investment practices and risk characteristics. Their performance is then evaluated against that of a certain benchmark-typically a broad-based index that is supposed to be representative of the investment style of the funds.