OhNoNotimAgain wrote:Why would a manager not try and outperform a bull market?
I don't. For me the stock market is a collection of investment opportunities with very different risk profiles. Just because I choose to invest in the stock market doesn't mean to say I need to expose myself to all the risks in the market. I can choose my own objectives and risk profile. So if for example I want to ignore riskier elements such as loss making oil and gas exploration, technology or biotechnology companies on the hope that they will make good in years to come then that's OK with me even if they happen to be what's hot at a given or potentially extended period of time. I am quite happy to get a 12% return even if the market is returning 15% if 12% exceeds my objectives and I have a risk profile I am comfortable with. I also happily invest in mutual funds and investment trusts that are willing to accept market underperformance if that means they avoid hot, and in their view, over-priced market sectors.
Partly for this reason I track my absolute performance but I do not compare my portfolio performance to any benchmark. One of the mutual funds I invest in has an absolute goal of inflation plus 10%. Their goal is not to beat a market index so I am not alone.
If your goal is to beat the index regardless of what the index might comprise then I appreciate this approach will not be for you but it's fine for me.
Pendrainllwyn