Manager Universe (Benchmark)

AAA

DEFINITION of 'Manager Universe (Benchmark)'

A peer group of investment managers who have the same investment style. Manager universe data is often used for comparisons and evaluating the performances of money managers. This analysis may report information such as the returns each fund generates against other similiar styles.

INVESTOPEDIA EXPLAINS 'Manager Universe (Benchmark)'

For example, a manager universe might consist of the subset of investment managers who manage large growth portfolios.

Evaluating investment performance using manager universe data has three major shortcomings:

First, it is difficult to compare managers, because they typically have different investment styles and change their investment styles periodically.


Second, manager universes are usually subject to survivorship bias, meaning that managers with poor performance records get dropped from the universe and the universe doesn't present a complete picture of all managers' performance.


Third, managers' rankings can change significantly from quarter to quarter because of market events and investment performance. Relying on manager universe data to evaluate a fund or portfolio's investment performance is, thus, an oversimplified approach. A benchmark portfolio provides a more accurate basis of comparison.

RELATED TERMS
  1. Comparison Universe

    A comprehensive grouping of investment managers with similar ...
  2. Advisor

    1. The person or company responsible for making investments on ...
  3. Financial Accounting

    The process of recording, summarizing and reporting the myriad ...
  4. Financial Planner

    A qualified investment professional who helps individuals and ...
  5. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  6. Incubation

    A trial process in which a fund company operates a number of ...
Related Articles
  1. 5 Ways To Rate Your Portfolio Manager
    Active Trading Fundamentals

    5 Ways To Rate Your Portfolio Manager

  2. Mutual Funds & ETFs

    Active Management: Is It Working For ...

  3. Fundamental Analysis

    A Beginners' Guide To Managing Your ...

  4. Active Trading Fundamentals

    Analyzing Mutual Fund Risk

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center