Benchmark

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Benchmark

The performance of a predetermined set of securities, used for comparison purposes. Such sets may be based on published indexes or may be customized to suit an investment strategy.

Benchmark

A standard against which a security's performance is compared. A benchmark is usually an index of securities of the same or similar class. Stocks are usually compared against stocks; bonds against bonds, etc. Another type of benchmark considers securities according to industry: a telecommunications stock may be compared to other telecommunications stocks. Likewise, mid-cap securities may be benchmarked against other mid-cap securities. Some indices, such as the Dow Jones Industrial Average and the S&P 500, are considered to be benchmarks for the wider economy.

benchmark

A standard by which something is measured. For example, bond yields are generally compared to benchmark yields on U.S. Treasury securities of similar maturity. Mutual fund performance is often compared to changes in the Standard & Poor's 500 Stock Index.

Benchmark.

An investment benchmark is a standard against which the performance of an individual security or group of securities is measured.

For example, the average annual performance of a class of securities over time is a benchmark against which current performance of members of that class and the class itself is measured.

When the benchmark is an index tracking a specific segment of the market, the changing value of the index not only measures the strength or weakness of its segment but is the standard against which the performance of individual investments within the segment are measured.

For example, the Standard & Poor's 500 Index (S&P 500) and the Dow Jones Industrial Average (DJIA) are the most widely followed benchmarks, or indicators, of the US market for large-company stocks and the funds that invest in those stocks.

There are other indexes that serve as benchmarks for both broader and narrower segments of the US equities markets, of international markets, and of other types of investments such as bonds, mutual funds, and commodities.

Individual investors and financial professionals often gauge their market expectations and judge the performance of individual investments or market sectors against the appropriate benchmarks. In a somewhat different way, the changing yield on the 10-year US Treasury bond is considered a benchmark of investor attitudes.

For example, a lower yield is an indication that investors are putting money into bonds, driving up the price, possibly because they expect stock prices to drop. Conversely, a higher yield indicates investors are putting their money elsewhere.

Originally the term benchmark was a surveyor's mark indicating a specific height above sea level.

benchmark

A permanent reference mark,usually set in concrete or iron and used to establish the elevation above sea level or certain corners in a surveying system. All other measurements in the area should be checked for accuracy relative to the nearest benchmark, preferably against several nearby benchmarks to establish redundancy.

References in periodicals archive ?
The known bench marks were therefore bench mark C 36, stabilised in Medvode and bench mark HE8 in Bostanj.
Richard Hofstrand is president of the Bench Mark Group and has more than 30 years of experience in teaching and training in the public and private sectors.
The survey will establish current use of resources by students, investigate student's attitudes to printed and digital material and how the use of one affects the other, and provide bench mark data from which to monitor changes over time.
The working capital credit line is in the amount of RMB 140 million (approximately US$ 22 million) and carries an interest rate of People's Bank of China Bench Mark Rate x 1.
In recognition of the Airport's efforts in setting the bench mark for other Florida airports to emulate, the Board will also present an award to the Broward County Board of County Commissioners honoring the Airport's successes.
Such high-profile clubs will give an indication to the players from the academy, the bench mark which is required to make the grade
Bishop Jo Seoka of the Anglican Church of Pretoria, South Africa and head of the Bench Marks Foundation of Southern Africa for Corporate Responsibility, said: "Our work in South Africa is to address both the unequal globalization process and the historical consequences of apartheid, to build a new relationship between business and civil society, one that is to the benefit of workers, civil society and business.
The Chief Minister has also constituted a committee to take stock of the existing working conditions in the stone grinding factories and ensure compliance with the labour safety standards as per international bench marks.
The HEC project is only for funding to the higher education and to achieve some bench marks for future to be completed in five years, he said.
According to Ali, the present regime of the PCB led by Mohammad Zaka Ashraf has done a lot to set new bench marks to promote women's cricket in the country, adding that game had gained rapid success in recent years, the Daily Times reports.
It would be important for us to be able to compare the bench marks from year to year.