Underperform

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Underperform

In general, this means to do worse than some particular benchmark. Mutual Fund XYZ is said to underperform the S&P500 if its return falls short of the S&P500 return. However, this language does not take risk into account. That is, one might have a lower return than the benchmark in a particular year because of lower risk exposure. Underperform is also a term used by analysts to describe the prospects of a particular company. Usually, this means that the company will do worse than its industry average. Related: outperform.

Underperform

A broker's or brokerage firm's rating of a security. Such a security is expected to do marginally worse than the market as a whole for the period of time it holds the "underperform" rating. Some firms call the rating "market underperform" "moderate sell" or "weak hold." Different firms have different rating systems, but "underperform" is usually one rating above "sell" and one rating below "market perform" or "neutral." For example, if the market is expected to rise slightly, but a certain company's fundamentals are thought to be slightly weaker than the rest of the market, a brokerage firm might change that company's rating from market perform to underperform.
References in periodicals archive ?
Boards sometimes defend their inaction on underperformers by pointing out that term or age limits will eventually take care of the problem.
His authority to take action comes from the No Child Left Behind Act of 2001, which allows for a takeover and restructuring of staff for schools designated as underperformers for more than five years.
Last year, nearly 60 percent of the respondents strongly agreed that they would be delighted if their companies were quicker to dismiss underperformers or to move them into less critical roles.
In contrast to almost all of its other international operations, Wal-Mart's Japan business has been a consistent underperformer, having failed to achieve a profit since Wal-Mart acquired its initial stake in Seiyu Ltd.
After being the clear underperformer in the overnight session following the S&P outlook downgrade to the UK, Sterling has been outperforming in the US as traders use the dips as formidable buy opportunities after discounting the rating agency downgrade and instead focusing in on the stronger retail sales and prospects for global macro recovery.
Still, Wewer kept his rating on the stock unchanged at "Sector Underperformer," since the retailer has "lost substantial market [share] over the past few years and a turnaround will be a multiyear process.
On the flip side, this season's DOA offerings ("Mike O'Malley," "Wasteland") have been buried six feet under -- with others, like underperformer "Falcone," about to push the daisies as well.
The board tossed out by an institutional owner, TIAA-CREF, which then ushered in its own new board to turn around this chronic underperformer and salvage the fund's investment.
QTS has been a perennial underperformer, delivering inferior total shareholder returns to Data Center Peers over several years, including underperforming by nearly 100% since the Company's October 2013 IPO.
Dubai: Qatar index, which has been an underperformer in the region, ended 1.
The FTSE 350 Mining Index has been a perennial underperformer over the last year, falling 16 percent in 2013 due to persistent concerns about an economic slowdown in China - the world's biggest metals consumer.
With another council chronic underperformer, the housing department, elevated to a one star rating after years in the doldrums, city leaders are confident that Birmingham will at last be lifted out of the relegation zone of the Audit Commission's local authority performance table.