Andre, first, you have to recall that we're dealing with Carl, who is a huge fan (the crusader, as I've called him at times) for geometric. Second, I have never quite seen his version of arithmetic before; I agree with you that it's simply Portfolio Return minus Benchmark Return (Carl's either introduced a twist or someone interjected a typo; this happens). As for geometric, this version, too, is new to me, as I'm used to (Portfolio Return / Benchmark Return) minus one. The industry (world view) preferance for arithmetic dwarfs those who support geometric. This is really an academic subject, as the clients even in the UK overwhelmingly (as per our surveys) prefer arithmetic. Still lots of fun for discussion, preferably over a pint.