Berk is evaluating a small cap active fund that is benchmarked to the ASX Small Ordinaries. The

ASX Small Ords $($short for Ordinaries$)$ consists of the smallest $200$ firms in the ASX $300.$ The

ASX $300$ is an index of the largest $300$ firms listed on the Australian market. Berk gathers the

index's sector allocation for the last $2$ quarters as well as the allocation for the fund for the first

quarter to see if the fund manager was an active fund manager and if the fund manager had

correctly forecasted the sectors that would better and worse

Please refer to the picture for the numbers and industry. $\backslash$table$[[$Industry Sector,BM $($Q$2),$BM $($Q$1),$Fund $($Q$1)],[$Materials$,22\mathrm{.}07,24\mathrm{.}63,24\mathrm{.}9],[$Industrials$,7\mathrm{.}23,6\mathrm{.}94,14\mathrm{.}85],[$Health Care,$5\mathrm{.}99,5\mathrm{.}09,12\mathrm{.}22],[$Information Technology,$9\mathrm{.}19,8\mathrm{.}35,12\mathrm{.}89],[$Consumer Discretionary,$13\mathrm{.}03,12\mathrm{.}42,7\mathrm{.}96],[$Consumer Staples,$5,5\mathrm{.}18,6\mathrm{.}06],[$Communications$,5\mathrm{.}17,6\mathrm{.}07,5\mathrm{.}53],[$Energy$,5\mathrm{.}41,6\mathrm{.}66,2\mathrm{.}98],[$Financials $($ex Property Trusts$),11\mathrm{.}81,10\mathrm{.}19,2\mathrm{.}21],[$Real Estate,$15\mathrm{.}1,14\mathrm{.}47,10\mathrm{.}4]]$

Required:

a$)$ Which sectors did the fund manager predict correctly and which sectors did he make an incorrect prediction? Fund manager's sector allocation compared with BM Q$1$ sector

allocation, and the difference between BM Q$1$ to Q$2$ change will provide you with the information.

b$)$ Explain if the fund manager performed better or worse than the BM over the quarter? Please do not include transaction costs or management fee.

Also can someone please elaborate on the question a$?$ how's the relation between fund vs benchmark, and how to know whether fund manager prediction is gaining more than the benchmark.