Evaluating Manager Performance
Overview
Evaluating manager performance is a challenging subject. It is generally believed that a portfolio that takes more risk, will
generate higher returns on average. This means that just ranking managers by total return is not a clear indicator of skill, it
may just mean that the manager is taking excessive risk.
As such, evaluating manager performance often means understanding the types of sizes of risk that the manager is taking, and
whether the returns generated were the expecteed returns from those exposures, or whether the manager has additional skill.
Asset Classes
- Benchmark Based
- the standard way to evualuate equity manager performance. Includes the information ratio.
