Comparison Universe

DEFINITION of 'Comparison Universe'

A comprehensive grouping of investment managers with similar mandates and investment objectives, used as a benchmark to measure a money manager's performance. The size of the fund or money management firm, in terms of assets under management, is another consideration in creating a relevant comparison universe. The best money managers generally figure in the top quartile of their comparison universe on a consistent basis.

BREAKING DOWN 'Comparison Universe'

One criticism of using a comparison universe to measure how well a manager is doing, is that the defined parameters may be too broad to be an effective gauge of performance. Another drawback is that a comparison universe may set an unrealistically high benchmark for investment performance, by excluding poorly-performing managers who are no longer in business, or whose assets have been merged with those of another manager. This is called survivorship bias.

RELATED TERMS
  1. Manager Universe (Benchmark)

    A peer group of investment managers who have the same investment ...
  2. Money Manager

    A business or bank responsible for managing the securities portfolio ...
  3. Investment Management

    A generic term that most commonly refers to the buying and selling ...
  4. Benchmark

    A standard against which the performance of a security, mutual ...
  5. Funds Management

    The management of the cashflow of a financial institution. The ...
  6. Multiple Managers

    A situation that occurs when an investment portfolio's assets ...
Related Articles
  1. ETFs & Mutual Funds

    How's Your Mutual Fund Really Doing?

    Determine how fund managers are doing by sizing them up against their peers.
  2. ETFs & Mutual Funds

    Benchmark To Show Winning Returns

    You can't win if you don't keep score. Read on to learn how to measure your returns.
  3. Investing

    Want A Career In Asset Management? Read This First

    When it comes to landing that job at an asset manager, not all degrees are created equally. Here's a look at the best schools for the job.
  4. ETFs & Mutual Funds

    Active Management: Is It Working For You?

    There are guidelines to be followed when comparing an actively-managed investment strategy with a benchmark.
  5. Managing Wealth

    Explaining Assets Under Management

    Assets under management is a metric that measures the market value of assets that an investment company manages for investors.
  6. ETFs & Mutual Funds

    The 4 Key Elements Of A Well-Managed Portfolio

    If you choose an actively managed portfolio, be sure that your manager isn't neglecting one of these four points.
  7. ETFs & Mutual Funds

    Choose A Fund With A Winning Manager

    We break down the key components of analyzing a fund manager's performance so you can find a winner.
  8. Financial Advisor

    5 Benefits of Investing With One Asset Manager

    Learn why one asset manager may be better for your portfolio’s rate of return and underlying costs as opposed to many managers.
  9. Managing Wealth

    The Evolution Of Money Management

    We look at the development of the money management profession and how it impacts professional money managers today.
  10. Financial Advisor

    Wells Capital Management: Investment Manager Highlight (WFC)

    Read about Well Fargo & Company's institutional asset management subsidiary Wells Capital Management, a firm with over $348 billion in assets under management.
RELATED FAQS
  1. What percentage of asset management firms are privately held and not publicly traded?

    Explore asset management firms, a major part of the financial services sector, and learn about the respective markets served ... Read Answer >>
  2. What is the difference between passive and active asset management? (SPY)

    Find out about active asset management, passive asset management, how these strategies are utilized and the differences between ... Read Answer >>
  3. Where do most fund managers get their market information?

    Many fund managers, whether they manage a mutual fund, trust fund, pension or hedge fund, have access to resources that the ... Read Answer >>
  4. Where does a hedge fund get its money?

    Learn how a hedge fund is structured and how the managing partner of the fund goes about the process of finding and soliciting ... Read Answer >>
  5. What is the difference between passive and active portfolio management?

    Understand the difference between active portfolio management and passive portfolio management, and how each strategy benefits ... Read Answer >>
  6. What should you take into consideration when choosing a portfolio management service?

    Understand several important issues and considerations when evaluating and choosing a potential portfolio manager and why ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center