Flexible allocation funds usually do not state any benchmark. Because flexible funds allocations are dynamic and less constrained, determining an appropriate benchmark for the funds is challenging. I am evaluating Morningstar flexible allocation which investment area is Europe and currency is Euro.
My performance evaluation is versus a passive 60% equity and 40% bond benchmark:
- FTSE EURO BROAD INVESTMENT GRADE BOND INDEX (EUROBIG) TR (32%)
- MSCI EUROPE GR EUR (50%)
- FTSE WORLD BROAD INVESTMENT GRADE BOND INDEX HEDGED TR (8%)
- MSCI WORLD EX EUROPE EUR GR (10%)
Do you think this would be an appropriate benchmark for performance evaluation? Is any asset class overweighted? Is correct to include a little quote of non european assets although the investment area declared is europe?
For the (3) index, is it better to use:
- FTSE WBIG EUR
- FTSE WBIG Hdg EUR
- FTSE WBIG NonEUR EUR
- FTSE WBIG NonEUR Hdg EUR
Thank in advance for your answer.