Benchmark
InvestingGlossary term
Definition
A standard index or portfolio used to measure investment performance. Common benchmarks include the S&P 500 for large-cap stocks and the Bloomberg Aggregate Bond Index for bonds.
Related terms
- Index FundA type of mutual fund or ETF designed to track the performance of a specific market index, like the S&P 500. Known for low fees and passive management strategy.
- S&P 500A stock market index tracking the 500 largest US companies. Widely used as a benchmark for the overall stock market and the basis for many index funds.
- AlphaA measure of an investment's performance compared to a benchmark index. Positive alpha indicates outperformance, negative alpha indicates underperformance. Represents the value added by active management.
Get advice that uses your real numbers
Warren reads your accounts and explains what terms like this mean for your plan. Free to start, no credit card required.