Measure the risk-adjusted performance of a fund's management relative to the fund's peer group (peer groups are listed and defined earlier in this guide). This performance rating is based on the manager's "value added" while with the fund; that is, the difference between a manager's actual average annual return while at the fund and the "expected" return as determined by the level of risk assumed relative to the fund's peers.

In calculating Manager Ratings, risk is measured by the standard deviation of monthly returns since the manager took over the fund expressed as a ratio to the standard deviation of the fund's peer group for the same period (after adjusting for the risk-free rate of return on a U.S. Treasury Bill).

Once the fund's relative risk is measured, it is used to calculate the annualized return that would be "expected" when assuming such a risk level within the peer group. This "expected" return is subtracted from the fund's actual average annual return, and the resulting manager rating figure, listed in this index, can be considered the manager's "value added" while with the fund. If a manager has been in place for less than two years, no rating is calculated. Also, the measurement period extends back only so far as there are at least five funds in the peer group.