tag:blogger.com,1999:blog-2568941354104807757.post2955110234979962133..comments2023-10-05T09:07:24.225-04:00Comments on Investment Performance Guy: Performance HolidaysDave Spauldinghttp://www.blogger.com/profile/01777929408680234896noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2568941354104807757.post-66339410124936994472013-05-30T21:47:27.704-04:002013-05-30T21:47:27.704-04:00Steve, great point about using the composite's...Steve, great point about using the composite's return as the proxy during the holiday!Dave Spauldinghttps://www.blogger.com/profile/01777929408680234896noreply@blogger.comtag:blogger.com,1999:blog-2568941354104807757.post-44276839072381289182013-05-30T21:46:50.004-04:002013-05-30T21:46:50.004-04:00THE FOLLOWING IS FROM STEVE CAMPISI:
Some of the ...THE FOLLOWING IS FROM STEVE CAMPISI:<br /><br />Some of the "confusion" in this area comes from working with an unclear question, so I suggest that we first clarify what we are measuring: the return of the manager's fund or the return of the client's holding in the manager's fund. Two different things and two different calculations, and also two different people using the information - the fund manager and the client. If the client wants to know the manager's return relative to the benchmark for some sort of market-relative evaluation, then the client can simply use the composite's time weighted return (and if it's a mutual fund or other commingled vehicle, then it's even easier: use the fund return.) If the client want's to know the return of his investment in the fund then the client must use the money-weighted return. The difference between the TWR and the MWR is the result of cash flow activity. Good insights.<br /><br />This is pretty obvious stuff. The "confusion" or "controversy" comes from trying to see the world through a GIPS lens, when in reality GIPS is simply a specific application that supports marketing of individual investment products. It has little to do with evaluating the results of investments on an ongoing basis, and it has nothing to do with evaluating either an actual investment in an individual product or that product within an overall portfolio invested across many asset classes. <br /><br />That's the difference between marketing and the real world of investments.Dave Spauldinghttps://www.blogger.com/profile/01777929408680234896noreply@blogger.com