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. Financial Accounting

    The process of recording, summarizing and reporting the myriad ...
  3. Advisor

    1. The person or company responsible for making investments on ...
  4. Incubation

    A trial process in which a fund company operates a number of ...
  5. Financial Planner

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

    An investment vehicle that is made up of a pool of funds collected ...
Related Articles
  1. Active Trading Fundamentals

    5 Ways To Rate Your Portfolio Manager

    Investopedia explains: These five performance ratios will help you measure how good your money manager is at increasing the value of your portfolio.
  2. Mutual Funds & ETFs

    Active Management: Is It Working For You?

    There are guidelines to be followed when comparing an actively-managed investment strategy with a benchmark.
  3. Fundamental Analysis

    A Beginners' Guide To Managing Your Money

    Discover what you need to know before becoming your own money manager.
  4. Active Trading Fundamentals

    Analyzing Mutual Fund Risk

    Find out whether a fund's performance is a result of the manager's abilities, or just a fluke.
  5. Mutual Funds & ETFs

    How's Your Mutual Fund Really Doing?

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

    Mutual Fund Basics Tutorial

    Learn about the basics - and the pitfalls - of investing in mutual funds.
  7. Investing

    Is the Best Plan for Pot Investing 'Wait-and-see?'

    Legalized marijuana is an emerging industry and those interested in investing in it should proceed with caution.
  8. Active Trading Fundamentals

    20 Rules To Trade More Professionally

    Break free from the pack and join the professional minority with an approach that raises your odds for long term prosperity.
  9. Bonds & Fixed Income

    Figuring Out How To Cover Your Liability Bases

    Whenever we talk about the asset-liability approach to portfolio management (ALM), the concepts of immunization and cash flow matching come into play.
  10. Investing

    Hedged ETFs That Help You Cushion Currency Impact

    If you’re an investor holding non-U.S. assets, the returns on your investments will be affected when you translate your investment from its local currency

You May Also Like

Hot Definitions
  1. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  2. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  3. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  4. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  5. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center