ABSTRACT
Frequently portfolio performance is evaluated by means of comparison with general stock indices, such as the FTSE 100 or FTSE All-Share Index.However this may not be appropriate if the evaluated fund follows a particular style. For example a smaller companies fund should be compared with a smaller companies index rather than a general stock index.Also portfolios have management and transaction costs, whereas indices do not. For this reason it may be more appropriate to evaluate the performance of a fund against that of other funds. For this purpose a comparison universe of other funds may be used.
