In 1997 the National Post decided that all Canadian Investors needed a benchmark based on a typical Canadian investor holding a properly diversified portfolio and sensitized to the investor’s risk tolerance.
Richard Croft co-developed a set of three risk-adjusted indexes – one each for Income (Conservative), Balanced, and Growth investors. These three indexes are reported daily in the “FP Investing” section of the National Post and have become accepted as standards in the industry.
The benchmarks are investable, which means that any investor can buy the investments that make up the index. And it also means that investors should expect performance which is at least as good as the index. Established with an April 1, 1996 start date, the indexes have produced first, second and third quartile results in each three-year period compared with all global balanced funds available in Canada. That is, they have finished ahead of at least half, and often three-quarters, of comparable mutual funds.
We believe a benchmark should be challenging. The FPX Indexes are, which is why we use them as benchmarks for our portfolios.