Fund ratings agency Lipper has launched a range of indices for actively managed equity funds that measure the performance impact of a fund manager's investment picks.

Analysts at Lipper combine all the funds within a single equity sector to generate an index so fund managers can monitor the security and cash allocations of their peers.

A fund can then be matched against the index to show which selections have driven the fund's performance and to see whether the fund is over/underweight in a particular stock.

Unlike other indices, the Lipper active index also monitors the cash holding within the sector.

Depending upon the software system used, companies can then group the securities together into sectors, industries or countries for further analysis.

Lipper's global product manager Lucas Garland, said: "By averaging fund stock and cash positions to create a snapshot of the holdings within a specific sector and then comparing against an individual fund, users can evaluate a manager's contribution to returns and compare this to the competition."

The active indices are dated one month in arrears and updated each month and are only available for equity sectors containing more than fifteen funds.