what are benchmarks 
a benchmark is a standard that is used to measure the change in an asset s value or another metric over time in investing benchmarks are used as a reference point for the performance of securities mutual funds exchange traded funds portfolios or other financial instruments generally broad market and market segment stock and bond indexes are used for this purpose even cryptocurrencies have benchmarks hallmarking the importance of having something to compare an asset s performance to if there is an investment instrument there is a benchmark to compare it to learn more about benchmarks and how you can use them to check your portfolio s performance investopedia yurle villegasunderstanding benchmarksmarket benchmarks are indexes a market proxy created to include multiple securities assets or other instruments to represent the performance of a stock fund or any other investment of the same type and composition benchmark indexes have been created across all types of asset classes for example the s p 500 and dow jones industrial average are two of the most popular large capitalization stock benchmarks in the equities market the s p 500 was created by standard poor s it lists 500 companies there are actually 505 stocks on the index based on specific metrics and valuation techniques that reflect the best performing stocks on the stock market according to the professionals at s p the dow jones industrial average comprises 30 u s blue chip stocks the stocks of well recognized established and financially sound companies the s p 500 of course has many more stocks listed on it than the dow does but there are many similar stocks both of these indexes are used by many to gauge the performance of the stock market as a whole even though they only represent a fraction of the stocks listed on public exchanges mutual fund investors may use refinitiv lipper indexes which use the 30 largest mutual funds in a specific category while international investors may use msci indexes 12 the wilshire 5000 is also a popular benchmark it represents all of the publicly traded stocks in the u s 3fixed income indexes measure the performance of fixed income assets like bonds and treasuries which investors use for generating income or as a way to preserve capital during falling market conditions some examples of top fixed income benchmarks include the bloomberg aggregate bond index known as the agg the bloomberg capital u s corporate high yield bond index and the bloomberg capital u s treasury bond index 4commodity indexes measure the performance of a basket of commodities for example the bloomberg commodity index bcom consists of 23 exchange traded physical commodities futures the index measures 21 commodities across five different sectors and acts as an indicator of the performance of the commodities market the five sectors are 5in addition to traditional benchmarks representing broad market characteristics such as large cap mid cap small cap growth and value you ll also find indexes based on fundamental characteristics sectors dividends market trends investing themes and much more thematic indexes are lists of stocks that meet specific criteria for a theme such as environmental social and governance esg or sustainability 67examples of benchmarksthe following are examples of the most popular benchmarks used in investing using benchmarks