There’s an issue with the mutual funds benchmark which needs fixing.
The issue is that the benchmark is one day ahead of the mutual fund data. This happens because what the benchmark did today, is reflected in mutual funds tomorrow.
The way to fix this is to either lag the benchmark data by a day or forward the mutual fund data by a day.
The simplest way to illustrate this error is to assume 1 day graph -
The benchmark moved 1% that day but my curve will move 1% next day. And this disparity will remain no matter how long a period I select.
Here’s I’m attaching a few screenshots to illustrate this.
Some info about this account -
It’s a very new account.
It has only one investment - Zerodha Nifty LM250
It has never invested or sold or done anything else
Considering this, its curve should completely match the LM250 benchmark, right?(except for minor tracking error)
And in reality it does exactly match, except that it is lagging by a day. The big jumps which happen in the benchmark today, take place in the mutual fund curve tomorrow.
This distorts the data by 1 day no matter how long a time period is selected. It needs to be reconsidered and fixed.