Benchmark

Markets

Definition

A standard index against which the performance of a mutual fund or portfolio is measured. Common benchmarks in India include the Nifty 50, Sensex, Nifty Midcap 150, and CRISIL indices. Fund performance should be evaluated relative to its declared benchmark.

Example

A large-cap mutual fund might use the Nifty 50 as its benchmark. If the fund returns 14% and the Nifty 50 returns 12%, the fund has outperformed its benchmark by 2%.

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