A new way of doing things

Behavioural finance studies have shown that the majority of investors measure the success of their holdings against the risk-free return on cash. This is in curious contrast to the majority of funds, which measure their returns against each other or an index. In difficult markets such as we are experiencing so far in 2008, a top-performing fund may well be one that has fallen less far than its peers, but that will be little comfort to the investor, who will be wistfully eyeing the 5% or so he could have got from a decent deposit account over the last year. In an attempt to address this an...