The concentration of a few large shares, and in particular Naspers, in local equity market indices has resulted in a shift by the parts of the investment industry that use market-weighted indices as benchmarks to indices that cap exposure to a single share. Investors have been informed that it isn't prudent for active fund managers to replicate such high concentrations in a few shares or a single share, and that in this way actively managed funds are better at managing the investment risks to which you are exposed if you track a market index. But the average investor should be forgiven for being confused as risk and return and measurement periods are all somewhat blurred. And a much broader debate about benchmarks and the risks for which performance should be adjusted is raised by only a few lone voices. The Foord Equity Fund, the country's fifth-biggest equity fund, is to adopt from July 1 as its benchmark the FTSE/JSE All Share capped index, which limits exposure to any single sha...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.

Questions or problems? Email or call 0860 52 52 00. Got a subscription voucher? Redeem it now