Active funds should aim to beat inflation, not S&P 500

With the exception of commodities, all major assets have seen inflation-adjusted losses exceeding 18 per cent this year. PHOTO: REUTERS
New: Gift this subscriber-only story to your friends and family

The new era of runaway inflation means it is time to stop measuring active investment managers’ performances against benchmarks like the S&P 500. That is the take from Mr Inigo Fraser Jenkins, one of the most famous quantitative analysts on Wall Street.

In a research paper published last week, he and his colleagues said that simply matching or beating a broad index likely does not deliver enough excess return to keep up with the inflation that has made covering living expenses harder by the day.

Already a subscriber? 

Read the full story and more at $9.90/month

Get exclusive reports and insights with more than 500 subscriber-only articles every month

Unlock these benefits

  • All subscriber-only content on ST app and straitstimes.com

  • Easy access any time via ST app on 1 mobile device

  • E-paper with 2-week archive so you won't miss out on content that matters to you

Follow ST on LinkedIn and stay updated on the latest career news, insights and more.