A sequence of filters is employed by us to reduce the fund managers performance to quantifiable terms. The intention is to identify the quality of performance and ascertain the managers capability to repeat the performance. Never once do the returns generated by the fund figure in the chosen parameters that we employ to ascertain management competence. Returns are the result of doing myriad activities right. Essentially it involves an exercise to figure out the DNA of the fund managers investment skills. So it makes sense to distill the characteristics of the manager over a defined time period and analyse the DNA to reach a conclusion.
The rigourous process of eliminating "chance" leads to higher predictive quality. As the process involved is completely quantitative, it eliminates bias and imparts clarity.