Fund evaluation?

hi all,
i have a uni assignment in which i have to analyse the performance of a few funds, the one which im struggling with is Dreyfus appreciation fund, would there be any benefits in choosing a fund with similar risk characterists (what i seem to have gathered that the lecturer thought was a good idea) and using that as a benchmark, or is it more appropriate to simply use say the S&P 500, thanks very much.

pete.

It is most common to use as a benchmark a market index such as the S&P 500 for large cap domestic funds. Dreyfus appreciation fund books itself as a large cap value fund with international exposure. The S&P 500 may not be the best benchmark to use in this case, but it certainly can be used. The fund itself used the S&P 500 as its benchmark, perhaps because a better benchmark does not really exist. However, since the fund is supposedly a large cap value fund, a comparison against the S&P 500 value index would seem to me more appropriate. For 10 years that index is up about 11% annually vs. the fund being up 6.84% annually and the S&P 500 index up 8.2% annually. Big difference in comparisons.

You can also check out the Moringstar rating of the fund and the Lipper rating. They also provide a benchmark. Moringstar rates the fund as 2 stars, not as bad as it gets but certainly below average. Lipper also rates the fund below average.

would never use a managed fund as a benchmark

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http://www.investingtutorial.info/

wish it will help you.

Good Luck , Best Wishes!