"are always intuitive to"

[yuanfang2009]

what does this phrase mean?
factor-model-based benchmarks are not always intuitive to the fund sponsor or even the investment manager.
thx!!

 

[ws]

It means that since fund sponsor or the investment manager didn’t develope the factor-model-based benchmark themselves; so when they are looking at the benchmark, they don’t know the details of how the benchmark is developed/constructed.

 

[GetSetGo]

Factor based benchmarks are developed by using past data and regression. So its not very intutive. The regression calculates a fund managers exposures to various factors basing on which a benchmark is constructed for the manager. Factor based models are like “returns based style analysis”.

 

[yuanfang2009]

thx!