Fund & BM Distribution

• Much financial analysis assumes so-called ‘normally <br> distributed’ (or Gaussian) returns, in practice <br> fund and benchmark return distributions often <br> differ significantly from this leading to unrealistic <br> assumptions and unexpected ‘black swan’ events. <br> • By examining the returns to see how they differ <br> from a Gaussian distribution the assessment <br> of past risks is more realistic, and more appropriate <br> historical performance measures can be adopted.