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 ?
Reynard is one of more than 600 companies to have received Accelerate funding towards completing the Benchmark Index.
The benchmark index (EGX30) dipped further below the 13,000-barrier, losing 0.
With an increase in Green Bond issuance, we have seen demand from institutional investors for a new benchmark in this emerging and rapidly growing market, said Brian Upbin, Head of Benchmark Index Research at Barclays.
This new benchmark family continues to expand the number of alternative weight bond indices available in the Barclays Capital benchmark index platform and widens the choice for investors beyond existing flagship indices which weight index eligible securities by their market value.
A benchmark index of Indian stock markets hit its third straight record closing high at 21,196.
The Egyptian benchmark index EGX 30 saw a break in its 11 consecutive working days of gains on Wednesday, when it dropped off to 5667.
market capitalization weighted benchmark index made up of the securities of 400 companies in diverse industries.
The underlying benchmark index comprises 2,000 small cap companies listed on US equity markets, which, combined, represent 10 percent of US market capitalisation.
04% drop in Egypt's benchmark index, the EGX 30, to reach 5337.
Summary: Dubai's benchmark index declined the most in more than a month on concern slower global economic growth may hurt company earnings.
Under the amended investment restriction, the Fund will be required to invest between 25 percent and 35 percent of its total assets in the securities of issuers in one or more industries if, at the time of investment, each such industry represents 25 percent or more of the Fund's benchmark index (the "Benchmark Index").
Axis Bank, the country s one of the top the private sector lenders, has recorded a 3% rise in its share price on Monday on the Bombay Stock Exchange (BSE), attributable to the BSE s announcement on adding the banking giant in its benchmark index, Sensex, from 23rd of next month.