Issues around performance attribution

AS THE year comes to a close, we shop around for the best priced staycation. For those who wish to travel, we shop around for the best holiday package or flights. We also compare between alternative gifts for Christmas. But shoppers must be able to compare alternatives in a meaningful manner.

The same applies when investors compare the performance of different risk assets. Investors in Singapore do invest their funds in different risk assets and with more than one asset management company.

Naturally, there is a tendency to compare returns. Advisers must provide fair, complete and accurate performance information to enable current and potential investors to make meaningful comparisons among alternatives.