They are judged by how close to the index their returns are. If there a significant deviation either way they are judged harshly. Each fund is different, but they typical thing they will do is buy a competitor of some company in the index once in a while.
replyTypically managers pay is such that they don't get awards for guessing correctly, so they won't get any upside from a correct second guess, and they will see downsides from incorrect guesses.
Also unlike traditional funds, there are not enough managers to follow every company, so they can't pick stocks that will win just because they don't have enough to time research the stock. When they pick a stock they are just looking at the high level will this company perform like the other peers in the industry long term.
this is the dumbest thing ive read.
if they are judged by how close to the index they are, then they would just buy the index.
please stop speaking about things you have no idea about. not only do you have no idea, you don't have the wherewithal to notice your statements do not make sense in their own context.
what happened to you where you let yourself turn into this?
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