Glide Invest FAQ: What is a benchmark?

What is a benchmark?

A benchmark is a standard against which the performance of a stock or mutual fund can be measured. 

The fund houses select benchmark indices on the basis of market capitalisation and sectoral or thematic strategies of the respective funds. Hence, every mutual fund scheme has a corresponding benchmark, against which one can compare the returns to judge its performance against the market. Comparing a fund’s performance with the benchmark tells us whether the fund has outperformed the market or not, across a range of time periods. Outperforming funds provide better returns than the benchmarking value.

Common Benchmarks Used for Different Fund Types
Benchmark
Focus
Fund Category
Nifty 50 TRI
Top 50 stocks by market cap
Large-cap
BSE Sensex TRI
Top 30 stocks by market cap
Large-cap
Nifty 200 TRI
Top 200 stocks by market cap
Large and Mid-cap
BSE 200 TRI
Top 200 stocks by market cap
Large and Mid-cap
Nifty Midcap 250
Top 250 midcap stocks
Mid-cap
Nifty Smallcap 250
Top 250 smallcap stocks
Small-cap
CRISIL Composite Bond Index

Dynamic Bond Fund
CRISIL Short Term Bond Index

Short Term Bond Fund

Broad market indices like BSE Sensex, CNX Nifty of the Indian stock market are generally used for comparing the performance of stocks or mutual funds. There are also other indices like Sectoral indices, Thematic indices etc. that are used for benchmarking.


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