To date, most mutual fund performance evaluations have been fairly simplistic: how has a fund performed relative to “the market”? The Standard & Poor’s 500 Stock Index is usually used as a proxy for the market, despite the fact that it accounts for only about 70% of the capitalization of the . stock market and is dominated by corporations with gigantic market capitalizations. (Its largest 25 stocks account, on average, for 1% of the entire market; the 6500 “non-500” stocks in the market have an average weight of 4/1000 of 1%.) But today, many funds resemble.
