Benchmarks

Presenter Todd BrunskillMarch 29, 2011

Benchmarks

Judge Smails: Ty, what did you shoot today? Ty Webb: Oh, Judge, I don't keep score. Judge Smails: Then how do you measure yourself with other golfers? Ty Webb: By height.

From the movie Caddyshack.

Benchmarks

• What are benchmarks• Why use a benchmark• Benchmark solutions at First Rate• What is should I consider• Open discussion• Win something

What are benchmarks?

• What is a Benchmark?A standard against which the performance of a security, portfolio or investment manager can be measured. Generally, broad market and market-segment stock and bond indexes are used for this purpose.

What are the types of benchmarks?

• Indexes– Daily– Monthly

• Peer groups• Policy• Blended• Models• Goals based

Why use a benchmark?

• Portfolio success tracking• Portfolio Attribution• Relative success of manager performance• Risk management and comparison

Benchmark Solutions at First Rate

• Monthly and Daily Benchmark services• S&P, Morningstar, Barclays, Russell, MSCI

Barra; over 1,000 benchmarks available• Domestic and Global benchmarks offered• Asset weighted and Policy benchmarks

(Blended benchmarks)• Historical blending of changes in benchmarks• Benchmark assignment to sectors with sorting

What is should be considered?

• Appropriateness • Consistent• Measureable• Total portfolio evaluation• Asset Class • Sector• Security (mutual fund, alternative asset)• Risk measures along with performance

What is should be considered?

• Goals based versus index only, • Is an index only solution sufficient for the

client or internal evaluation

What is should be considered?

Open discussion

• Asset weighted versus Policy benchmarks, which is more appropriate?

• What is the future of benchmarks in performance reporting?

• Should benchmarks change over time?•

Win something

• How many indexes does First Rate offer?• Are Morningstar indexes available through

First Rate?• Can First Rate support historical index linking?• Are there different kinds of blended

benchmarks?• If so, what are the different kinds?