Coffee Can Newsletter – May, 2018

Consider the period of 1st April 2000 to 31st March 2003, when the Sensex Index delivered -15% CAGR, i.e. negative returns (-28% in FY01, -4% in FY02 and -12% in FY03). During this period, investors would have preferred to either have exposure to an equity fund which delivered positive absolute returns or else have zero exposure to equities, rather than being satisfied with an equity fund manager who delivered relative outperformance vs the benchmark index but with negative absolute returns.