What is a fund’s benchmark, and why is it important?

What is a fund’s benchmark, and why is it important?

  1. A fund’s benchmark is a standard index or metric used to evaluate its performance relative to the broader market or a specific sector.
  2. It is important because it helps investors assess how well the fund is managed, measure returns against a comparable standard, and make informed investment decisions.
  3. A benchmark also provides transparency and helps determine whether a fund’s returns justify its risks and fees.
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