Title: Portfolio Performance Measurement and Benchmarking
Authors: David J. Christopherson, Wayne E. Carino, and David R. Ferson
In “Portfolio Performance Measurement and Benchmarking,” authors David J. Christopherson, Wayne E. Carino, and David R. Ferson address the essential topic of evaluating investment performance. The book’s purpose is to guide investment professionals, managers, and consultants through various methods and techniques for effectively assessing the performance of their investment portfolios. By offering insight into performance measurement techniques and the role of benchmarking, the authors aim to help readers make informed decisions and enhance their investment strategies.
The importance of assessing investment performance must be balanced, and this book emphasizes the value of accurately measuring returns to make investment decisions. The authors provide a comprehensive introduction to numerous performance measurement methods, diverging from traditional techniques such as the time-weighted return and internal rate of return. The book thoroughly explores modern approaches such as risk-adjusted performance metrics, attribution analysis, and the information ratio, allowing for a more accurate historical and forward-looking performance assessment.
Benchmarking is a crucial aspect of performance evaluation, and the book dedicates significant attention to this practice. By quantifying and comparing portfolio returns relative to a benchmark, such as an index or peer group, investors can gain valuable insights into their investments’ risks and potential rewards. The authors discuss various benchmark types, proper benchmark selection, and the importance of custom benchmarks tailored to specific investment strategies.
The authors present these ideas in a clear and accessible manner, often using real-world examples and case studies to illustrate their points. The book boasts a unique perspective by incorporating academic research and practical applications, creating a helpful resource for beginners and experienced professionals. Significant attention is given to the practical implications of the theories discussed, offering actionable advice for readers to implement in their investment processes.
In conclusion, “Portfolio Performance Measurement and Benchmarking” is a valuable resource for investment professionals interested in improving their portfolio management skills. The book offers a thorough, in-depth examination of performance measurement methods and the use of benchmarking to refine investment strategies. The authors combine theoretical knowledge with practical applications, producing a comprehensive and engaging read. While the book can be slightly dense at times, its strengths in content and relevance outweigh this minor weakness.
I highly recommend this book to investment professionals, portfolio managers, and financial analysts seeking to enhance performance measurement and benchmarking techniques. Students pursuing finance or investment management courses will also benefit from pragmatic insights. Overall, this book provides a valuable contribution to the field and an indispensable resource for those looking to refine their investment performance analysis skills.
