2015 CFAI mock 2 - Q 27 - Goldsboro case

Why the fund GB1 is being compared with STI index and not SGX (all stocks traded). When we compare the stocks value/growth should not we compare it against the market benchmark?

Because it’s just not like the SGX? Market Cap, Div yield, P/E, P/B, all like STI. And they say that the fund consists of stocks that are in STI. So it’s core/blend. It’s characteristics are very different from SGX, that’s why you don’t compare it with SGX.

Hmm. Got it. Thanks mate.

The entire Goldsboro item set is terribly constructed. I got this one wrong as well. Wouldn’t spend too much time thinking about it.

The question states that the three funds are benchmarked against the STI, so that’s what you compare them to. Simple as that.

For these funds, the STI is the manager’s benchmark. Per the question, the SGX is the *Investor’s* benchmark.

What about Q.22 on 2011 Mock-same Question set. It says that Fund GB2 will appeal to value investors who compare rpice to intrinsic value-Isnt that market oriented approach?