Do funds really need to beat their benchmarks?

Five years into an equity bull market, and with significant changes to the UK's savings regime on the horizon, more investors are asking: how important is a fund's relative performance?

Although never the be-all and end-all for any fund buyer, the significance of sector rankings and performance relative to an index is becoming less important, it has been argued. With income still a paramount theme, the active management industry’s desire to avoid benchmark-hugging has pushed some groups to do away with benchmarks altogether. “We have to rethink who it is we are investing for,” said Andy Brown, investment director the Prudential Portfolio Management Group.  ‘’The investor is the new benchmark’ is going to be an increasingly important trend.” “The concept of gene...