Benchmarking in Indian Mutual Funds

Benchmarking tells you against what market index you can compare the performance of your fund. CRISIL, ICICI Securities etc.. produces and maintains market indices for the debt market. in the equities market, we have popular indices like BSE Sensex, Nifty etc..
The major problem in the industry is the way each fund manager defines his benchmark and how he really manages the fund. When you hear about a balanced fund, you have a notion that it is 50:50 in equity and debt with plus or minus 10% on either side. But the author could see schemes with 80% equity allocation also claiming to be a balanced fund.

read the full text in Business Manorama dated 9th April 2007. It is from the family of Malayala Manorama and comes every Monday with the main daily