Portfolio Risk & Return

Benchmark

The yardstick a portfolio is measured against — usually a broad market index such as the S&P 500, held through a fund like SPY. Beta, the information ratio and the historical performance comparison are all measured against it: beta asks how much the portfolio moves when the benchmark moves, and the information ratio asks whether it beat the benchmark consistently. The choice matters. A bond-heavy portfolio compared with an all-stock index looks sluggish in a bull market and resilient in a crash — not because it did anything wrong, but because it was built for a different job. A fair comparison uses a benchmark that matches what the portfolio is built to do.

Educational information, not investment advice. See it applied across the screener →