Question

You are analyzing your portfolio after the first quarter of 2019 to examine the reasons behind its change in performance since 2018. Based on the below table alone, what conclusion can you draw about your portfolio's performance compared to the benchmark?

A) Your portfolio is performing about 2% better than the picked the right sectors but the wrong stocks in those sectors.
B) Your portfolio is performing about 2% worse than the picked the right sectors but the wrong stocks in those sectors.
C) Your portfolio is performing about 2% better than the benchmark. You picked the wrong sectors but the right stocks in those sectors.
D) Your portfolio is performing about 2% worse than the benchmark. You picked the wrong sectors but the right stocks in those sectors.

Answer 1

The conclusion that can be drawn about your portfolio's performance compared to the benchmark is that it is performing about 2% worse than the benchmark. You picked the wrong sectors but the right stocks in those sectors.

• Based on the given information, the conclusion that can be drawn about your portfolio's performance compared to the benchmark is option D) Your portfolio is performing about 2% worse than the benchmark.
• You picked the wrong sectors but the right stocks in those sectors.
• To understand this, we need to analyze the table provided. The benchmark has a return of 6%, while your portfolio has a return of 4%, indicating that your portfolio is underperforming the benchmark.
• However, it is mentioned that you picked the right stocks in the chosen sectors.
• This means that the stocks you selected within the sectors performed well individually, but the overall performance of the sectors you chose was not as good as the benchmark's sectors, resulting in an overall underperformance for your portfolio.