Benchmark

How it is used

Fund documents name a benchmark, and managers try to beat, outperform or track it. Reports say a fund underperformed its benchmark by two percentage points. In bond markets, a 'benchmark bond' is the most traded issue that sets the reference rate.

Example sentences

1. The fund beat its benchmark by three percentage points last year.

2. The yield on the two-year benchmark bond fell after the inflation data.

Common collocations

• beat the benchmark
• benchmark index
• benchmark bond
• relative to the benchmark
• underperform the benchmark

Related terms

• indexA number that shows how the prices of a selected group of shares or bonds change over time, used to measure a whole market or sector.
• index fundA fund that aims to match the performance of a market index by holding the same securities in the same proportions, instead of trying to beat it.
• returnThe gain or loss on an investment over a period, including price changes and any income such as dividends or interest, usually shown as a percentage.
• passive investingA strategy of buying funds that follow a market index and holding them for a long time, rather than choosing individual stocks or timing the market.

This word in other fields

The same English word can have a different meaning in another field:

• benchmark · Software Engineering
• benchmark · Artificial Intelligence & Machine Learning
• benchmark · Civil Engineering & Construction
• benchmark · Healthcare Management
• benchmark · Management & Leadership

More terms: Markets & Indices

• stock market
• stock exchange
• investor
• liquidity
• sector
• emerging markets
• insider trading