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Misleading performance at UTIMCO?

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Misleading performance at UTIMCO? by Ted Barac

Summary

Benchmarks are a very important tool for judging the performance of investment managers.

Benchmark comparisons also have limitations, however, and can sometimes be misleading and disconnected from performance reality.

The University of Texas’ Investment Management Company provides a good case study as to how benchmark comparisons can potentially go wrong.

A rising tide can lift all ships while the converse can also be true. As such, relative performance and benchmarking is an important tool for judging the performance of any investment manager. The problem with benchmarking, however, is that it also has limitations and can often be misleading. I believe a good example of this relates to the benchmarking of the...

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