The Excess Returns chart shows the rolling excess returns of an investment over a benchmark over a specified rolling period
What does the chart show?
Each point on the chart shows the excess return of a product or portfolio over the specified period. The window is rolled over each month, creating the chart of Excess Returns.
How to interpret the chart
Short rolling periods will show more fluctuations, and by using longer rolling periods, short-term fluctuations are smoothed out. For periods longer than a year, excess returns are annualised
When to use the chart
Similar to Rolling Returns, the chart can be used to examine long-term return consistency and trend in different market conditions. It is also useful for products with a return target above a benchmark
Rolling period can be set to the investment time horizon to compare excess returns against targeted return above benchmark
Cumulative excess returns is available only for one-month rolling period. The chart demonstrates the effect of accumulated excess returns over the specified period. We recommend using periods longer than 1 year or equal to the manager’s stated time horizon