Edelweiss MF moves to ‘total return index’ benchmarking

Facing criticism over significant Chinese ownership, Paytm founder Edelweiss Asset Management on Monday said it would disclose the performance of its equity mutual fund (MF) schemes against the ‘total return index’ of their respective benchmarks. Total return index factors in dividend income. Currently, most funds are benchmarked to price return index, which just captures the price performance of underlying stocks. According to Edelweiss, the total return index is a more accurate measure of performance and a better measure of capturing true alpha — the excess returns. Last month, another asset manager, DSP BlackRock, announced it would disclose the performance of its equity MF schemes with the total return index as the benchmark. “We think this practice will provide an accurate picture of the performance of our funds relative to their benchmarks, both internally and externally,” Radhika Gupta, CEO, Edelweiss Asset Management, said. BS REPORTER