Benchmark Bond

What Does Benchmark Bond Mean?
A bond that provides a standard against which the performance of other bonds can be measured. Government bonds are almost always used as benchmark bonds. Also referred to as "benchmark issue" or "bellwether issue".

Investopedia explains Benchmark Bond
More specifically, the benchmark is the latest issue within a given maturity. For a comparison to be appropriate and useful, the benchmark and the bond being measured against it should have a comparable liquidity, issue size and coupon.

Related Terms

Benchmark
Bond
Bond Equity Earnings Yield Ratio - BEER
Coupon
Government Security
Liquidity
Maturity
Trading Effect
Treasury Bond
More Related Terms

Related Links

Bond Basics Tutorial - Investing in bonds - What are they, and do they belong in your portfolio?
The Advantages Of Bonds - They may not be sexy, but bonds do have a place in every balanced portfolio. Find out why.
Basics Of Federal Bond Issues - Treasuries are considered the safest investments, but they should still be analyzed when issued.
Corporate Bonds: An Introduction To Credit Risk - Corporate bonds offer higher yields, but it's important to evaluate the extra risk involved before you buy.
Benchmark Your Returns With Indexes - If your portfolio is always falling short, you may not be making an apples-to-apples comparison.

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