Benchmark

Typically, a benchmark is a market or sector index against which the performance of a mutual fund is measured. For example, if a fund invests mainly in Canadian stocks, the benchmark might be the S&P/TSX Composite Index which tracks companies trading on the Toronto Stock Exchange. By plotting a fund against an appropriate benchmark, one can see how investments held by the fund perform compared with the market or sector in general. For responsible investment, specialty benchmarks known as sustainability or social indices have been developed.