Model relative
Relative performance is one of the City's happier notions. It means 'Never mind about your shares, look what has hap- pened to other people's'. Does the salesman from Greater South-East Asian Co-Pros- perity Fund tell you that his units have shown strong relative performance in a market which has begun to offer oppor- tunities? That's right, some funds would have lost even more. Fund managers, who are sometimes cruelly set to race against each other ('We're performance- orientated'), know that the race is to the horse which knows where to site the winning-post. To them and to you, an anonymous Savoyard at brokers Wood Mackenzie offers his services:
I am the very model of a trust performance measurer, I'll dazzle your directors, and I'll titillate your treasurer, The figures that you show me in a manner sad and dutiful I'll polish by comparison to make them bright and beautiful.
Your equities will outperform, and so will your debenture stocks, If measured in the way in which I tell you to present your stocks: Your assets may have tumbled, but no assets ever fall enough To trail behind the index — if you choose the index well enough.
Forget these horrid nightmares! I shall certainly be sicker than A parrot if I cannot find a stock you've risen quicker than: I've indices galore, and you can see the choice proliferate By changing round the currencies (for that I charge a stiffer rate).
The faster-rising markets can be shown in really grotty terms - Imagine, say the Nikkei Dow expressed in Polish zloty terms, And Jacobson & Ponsbach (that's in Sweden) would be wholly a Disaster, if translated into Tugrik (that's Mongolia) ...
So long, that is, as no spoil sport measures your performance relative to that of your piggy-bank.
Christopher Fildes
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