How to use benchmarks

If you’re interested in benchmarking your portfolio, you could take the following steps:

1. Select your benchmark

This benchmark should act as a relevant comparison for the key aspects of your portfolio, including its asset allocation, risk profile, and overall investment strategy.

Choosing the wrong benchmark might lead to a flawed analysis and misunderstanding of your portfolio’s performance. If your portfolio doesn’t align well with a single index, you can track your portfolio against a few indexes to get a general idea of its performance. If you prefer to be more exact, you could also create a custom benchmark by blending together multiple indexes. There are…