The Euro-zone Value Stock Index earned a return of 18% during the past year.
• The Euro-zone Market Stock Index earned a return of 15% during the past year.
• During the same period, Well’s portfolio earned a return of 21%.
• Wells active risk computed with respect to the Euro-zone Market Stock Index is 6.7%
• Wells misfit risk is 5.5% annually.
I always have problems in determining which of these represent the manager’s normal benchmark return and which is the investror benchmark return. Would appreciate some assistance to help in undestanding one from the other.