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
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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.

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