The estimated ARC Index results for November are now available.

Survivorship Bias


When considering the utility of financial indices, inevitably, the issue of survivorship bias will be raised. The argument goes that managers/funds/companies in any given index at its commencement are then subject to the forces of natural selection. The result of this natural selection process is that the performance of survivors in any given index is biased upwards and, as the performance lookback period increases, all those remaining in the index end up being above average.

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