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Benchmark

A benchmark is a standard used to measure the performance of an investment, portfolio, or fund.

Common benchmarks include stock market indexes such as the S&P 500, MSCI World, or FTSE All-World Index.

 

Investors and fund managers compare returns against a benchmark to evaluate whether an investment is performing well relative to the broader market.

 

Choosing the right benchmark is important because it provides meaningful context for investment results.