Mainstream UK funds often use the FTSE All-Share index as a benchmark. We define benchmarking as: the process of setting a baseline or standard for your organizationso you can measure your performance over time, find areas for. The process shows the average or market salary for each job. Bond firms have created numerous indices to provide benchmarks for almost any bond you might want. Salary benchmarking, also known as compensation benchmarking, compares one company’s job descriptions and pay ranges to similar jobs in other organizations. An annual return of 5% on a bond portfolio might seem good, but if the portfolio’s benchmark returns 6% over the same period, you’ve fallen short of your goal.įund managers can choose their own indices, but they have to be credible. However the meaning of Benchmark stated above is reliable and authentic. What you need to know about benchmark indices.īenchmark indices enable you to weigh up the real success of your portfolio. Benchmarking is the practice of comparing business processes and performance metrics to industry bests and best practices from other companies. There is more than 1 meaning of each word. Benchmark definition According to Merriam-Webster, the literal definition of a benchmark is 'something that can be used as a way to judge the quality or level of other, similar things.' But in the. A stock fund, for example, might show how it has outperformed the FTSE All-Share. 2 What does benchmark mean Benchmarking is used to measure performance using a specific indicator, in our case yearly balance. A reference standard or basis for comparison that serves as a definition of a norm. A criterion of quality or service in health care, usually expressed as a measurable standard. If you read documents on mutual funds you own, you might have noticed that investment companies will compare performance to a benchmark index. TheFreeDictionary Google benchmark Also found in: Dictionary, Thesaurus, Financial, Acronyms, Idioms, Encyclopedia, Wikipedia. Where have you heard about benchmark indices?Īll investment and pension funds have a benchmark. The FTSE All-Share is an example of a benchmark index.
A benchmark index is a standard used to evaluate a fund’s performance over time. A standard or point of reference in measuring or judging the current value or success of your company in order to determine your future business plans. If you want to know how well an investment has fared, a good method is to compare it with an appropriate benchmark.
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