@article {Ryan49, author = {Ronald J. Ryan}, title = {Custom Liability Index: The Proper Benchmark }, volume = {5}, number = {4}, pages = {49--56}, year = {2015}, doi = {10.3905/jii.2015.5.4.049}, publisher = {Institutional Investor Journals Umbrella}, abstract = {Most assets are managed versus a generic market index as the objective benchmark. However, the true objective of most investors is to fund some type of liability. Without a custom liability index as the benchmark, assets are usually lost or misaligned versus the proper investment objective, resulting in performance-tracking errors and inappropriate risk{\textendash}reward behaviors. Quite often, this mismatch of asset risk{\textendash}reward behavior versus the liability risk{\textendash}reward behavior results in volatile funded ratios, deep deficits, higher costs, and higher risks to fund the liabilities. Until a custom liability index is installed as the proper benchmark index, investors may be misled as to the true risk{\textendash}reward objective.TOPICS: Mutual funds/passive investing/indexing, volatility measures}, issn = {2154-7238}, URL = {https://jii.pm-research.com/content/5/4/49}, eprint = {https://jii.pm-research.com/content/5/4/49.full.pdf}, journal = {The Journal of Beta Investment Strategies} }