(Portfolio Return - Market Return) > 0.
Here is the context. A fund manager suggested to me that investing with him was better for me than investing into a market index fund/etf. He cited his track record as proof. I asked him to guarantee me that a. his portfolio (on some periodic basis) would always outperform the market. In other words, if the market declined his portfolio may also decline but not as much as the market, and if the market ascended his portfolio would have to ascend better than the market. The fund manager was not willing to give me these guarantees because he did not know how to obtain insurance to pay for the event that the market outperformed his portfolio.
So, I began to think how it might be possible to obtain insurance with the available instruments of call and put options. Does anyone know how to do it?
I strongly disagree with paying a fund manager anything if his portfolio under-performs the market. A fund manager not confident enough to beat the market should buy appropriate insurance to deliver on his promise.