Benchmark

AAA

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.

RELATED TERMS
  1. Index Fund

    A type of mutual fund with a portfolio constructed to match or ...
  2. Index Hugger

    A managed mutual fund that tends to perform much like a benchmark ...
  3. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's ...
  4. Passive Management

    A style of management associated with mutual and exchange-traded ...
  5. Russell 2000 Index

    An index measuring the performance approximately 2,000 small-cap ...
  6. World Equity Benchmark Series - ...

    A type of international fund traded on the American Stock Exchange ...
Related Articles
  1. Is Your Portfolio Beating Its Benchmark?
    Bonds & Fixed Income

    Is Your Portfolio Beating Its Benchmark?

  2. An Introduction To Stock Market Indexes
    Investing Basics

    An Introduction To Stock Market Indexes

  3. Evaluating Your Stock Broker
    Brokers

    Evaluating Your Stock Broker

  4. Create Your Own U.S. Equity Portfolio
    Mutual Funds & ETFs

    Create Your Own U.S. Equity Portfolio

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center