When examining the performance of a fund, it is important to compare it with an appropriate benchmark. Some fund manager compared themselves with an inappropriate benchmark and thus making their investment returns look better than it seems. A common example of comparing to an in appropriate benchmark is for the fund to compare itself with an index for which the former included dividends reinvestment while the latter exclude dividends reinvestment. As a result, the former looks better than the latter. So when you look at a factsheet, always ask yourself whether the fund compare itself with an appropriate benchmark.

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