Comparison Universe

Posted in Finance, Accounting and Economics Terms, Total Reads: 86

Definition: Comparison Universe

Comparison Universe is a concept used to understand the performance of a money manager or a fund manager. It’s a peer group analysis technique to find out the money managers who are among the top based on performance. A manager universe is a group of large number of money managers who have similar investment style. This data is used to determine the performance of managers who follow a similar strategy but who has the best return out of all the managers.

The problem with manager universe is that managers have different strategies and it may further vary as per the market conditions. Also in a manager universe, the benchmark is very high as poor performing managers are not included in the manager universe.

A Comparison Universe is similar to manager universe having fund managers having the same style of investment. Usually AUM (Assets under Management) is used to group managers in a comparison universe. Nowadays Retail Investors look for Comparison and Manager Universe before investing into a mutual fund.



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