Benchmark

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DEFINITION of 'Benchmark'

A standard against which the performance of a security, mutual fund or investment manager can be measured. Generally, broad market and market-segment stock and bond indexes are used for this purpose.

INVESTOPEDIA EXPLAINS 'Benchmark'

When evaluating the performance of any investment, it's important to compare it against an appropriate benchmark. In the financial field, there are dozens of indexes that analysts use to gauge the performance of any given investment including the S&P 500, the Dow Jones Industrial Average, the Russell 2000 Index and even competitor fund.

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    The Standard & Poor's Depositary Receipt (SPDR) Financial Select Sector Fund (XLF) has net assets of $17.73 billion and ... Read Full Answer >>
  8. What are the most common ETFs that track the forest products sector?

    There are two common exchange traded funds (ETFs) that track the forest products sector: the Guggenheim Timber ETF (CUT) ... Read Full Answer >>
  9. How do you calculate r-squared in Excel?

    R-squared is a statistical relationship between two series of events. It is also a risk measure that is used in economics ... Read Full Answer >>
  10. What does a mutual fund's beta coefficient measure?

      Evaluating a mutual fund involves comparing returns, expenses and risk profiles with other funds. It can be quite simple ... Read Full Answer >>
  11. Is tracking error a significant measure for determining ex-post risk?

    Before we answer your question, let's first define tracking error and ex-post risk. Tracking error refers to the amount by ... Read Full Answer >>
  12. What should I use as a benchmark for my small-cap stock portfolio?

    When creating a stock portfolio, it is important to have a benchmark against which you can compare your returns. Comparing ... Read Full Answer >>
  13. What does it mean when people say they "beat the market"? How do they know they have ...

    "Beating the market" is a difficult phrase to analyze. It can be used to refer to two different situations: 1. An investor, ... Read Full Answer >>
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