Should we be using different benchmarks for funds?

BENCHMARKS

HSBC's Adam Olive explains why investors should not be afraid to consider alternative benchmarks.

We believe the importance of making the right call when it comes to investors deciding on how to allocate their portfolios geographically cannot be underestimated. However, we feel investors who follow global benchmarks are significantly underweight global emerging markets and should consider adjusting their positions accordingly. Historically, using a benchmark has helped investors with this task, where typically an allocation to each country is in proportion to the size of its financial markets. But we now feel there is a case for an alternative barometer to the traditional measure...