Benchmark
The index a return is measured against, chosen to match what the portfolio holds.
A benchmark separates what the market did from what the choices inside a portfolio added. A fund of large US companies is measured against the S&P 500, a small-company fund against the Russell 2000, a bond fund against a bond index. Against the wrong one, a return looks better or worse than it was.
The comparison has to be like for like twice over. The mix has to match, since a portfolio holding bonds trails an all-stock index in a rising market by design. And dividends have to be counted the same way on both sides: the S&P 500 as usually quoted is a price index that leaves them out, while a fund's total return includes them.
Promi's own portfolio figures are changes in value. The chart on the Investing page and the Portfolio line on the Markets card both include money added, so neither is a like-for-like return against the index shown beside it.
Worked through
Common pairings
| Holding | Usual benchmark |
|---|---|
| Large US companies | S&P 500 |
| Small US companies | Russell 2000 |
| Nasdaq-listed stocks | Nasdaq Composite |
| US investment-grade bonds | Bloomberg US Aggregate |
Where this lives in Promi
Investing page and dashboard. The portfolio chart can overlay the S&P 500, NASDAQ and DOW, and the Markets card sets six market references, from the S&P 500 to gold, beside your own figures.
Related in Investments & Portfolio
See your own benchmark
Promi computes this from your linked accounts, with the definition one click from the number.
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