The trustee is convinced of his method. He seems unaware of the drawbacks of it and also of the existence of alternative methods. Hence his implication that the investment manager is misleading them into thinking he has outperformed the market. To explain clearly to the trustee I would name the different methods (with reference to the one used by the trustee and his calcs), expalin the different methods (using the figures given) and also explain the advantages/disadvantages of each. I would conclude with stating which is reliable rate to measure the investment manager's skill. The investment manager's skill here is the issue trying to be measured so I don't see the need to define the MWRR/TWRR.
Last edited: Aug 27, 2009
