Benchmark
Also called: performance benchmark
An index or other standard against which a fund or portfolio's performance is measured.
A fair benchmark matches the kind of investments held and uses the total-return version of the index, including dividends. Comparing over full market cycles, after costs, avoids flattering or harsh judgements.
Learn more in these lessons
- Active and passive fundsShould you choose an actively managed fund or an index fund?
- Benchmarks and measuring performanceHow do you measure whether your portfolio is doing well?
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