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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:

  1. FTSE EURO BROAD INVESTMENT GRADE BOND INDEX (EUROBIG) TR (32%)
  2. MSCI EUROPE GR EUR (50%)
  3. FTSE WORLD BROAD INVESTMENT GRADE BOND INDEX HEDGED TR (8%)
  4. 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.

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