Are mutual funds getting benchmarked based on TRI?
Posted on: 06/Sep/2017 6:39:58 PM
The performance of mutual fund schemes have been getting benchmarked based on different kinds of indices as the regulations want it done. This benchmarking aids in making a comparative study of performance of the scheme as against the respective index and the total alpha generated by the scheme can be calculated. This also states about the total fund manager performance.
At present, all of the mutual funds are barring quantum benchmark to all of their schemes as against the simple price index where only the difference in price of stocks are captured. Recently, the DSP Black Rock Mutual Fund had issued notice about benchmarking all of the equity schemes that are actively managed with Total Return Index called TRI.
What is TRI?
This is primarily an index that captures the stock price movement of underlying companies along with dividend the company pays to the investors.
Hence, this will indicate about the true returns over a stipulated time period. And the simple price index shall only indicate the price changes in the index and overall capital gains out of the same.
