Performance Evaluation of an Equity Fund

John Smith is a portfolio manager at XYZ Asset Management, overseeing a growth-focused equity fund that has been in operation for three years. Over this period, the fund has generated an annualized return of 8%, compared to a benchmark return of 6%. The fund's standard deviation is 10%, while the benchmark’s standard deviation is 8%. John is preparing for an annual review and is required to evaluate the fund's performance against its benchmark.

Using the information provided, analyze John’s fund performance focusing on the following aspects:

• Relative and absolute performance metrics
• Risk-adjusted performance measures
• Potential limitations of the evaluation

Be sure to present your analysis logically and concisely.