What is a Benchmark Index?

There are many “benchmark indexes” that are used as indicators of performance. They represent a select group of stocks, bonds or other assets that are identified and used as a “benchmark” against which to track your investment portfolio’s performance.

Once the group of assets is identified, they are not actively managed, simply tracked and reported by the Index management firm. Investors use the index results to measure the relative performance of similar assets in their own portfolios.

There are many different indexes. Benchmark Index examples include: Russell 2000, S & P 500, MSCI EAFE index, NASDAQ Composite and Barclays Capital Aggregate Bond Index.

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