# Benchmark

*Saving & Investing — Finicade finance glossary*

A benchmark is the index a portfolio is measured against, and choosing it is half the argument about performance. A fund that beat the S&P 500 while holding small-cap value stocks may have badly lagged the right comparison. A fair benchmark matches the strategy's asset class, geography, size and style, which is why 'benchmark shopping' is such an effective way to make mediocre results look good.

**Also known as:** benchmark index, reference index

**Related terms:** [Market Index](https://finicade.com/glossary/market-index), [Tracking Error](https://finicade.com/glossary/tracking-error), [Alpha](https://finicade.com/glossary/alpha), [Active vs Passive Investing](https://finicade.com/glossary/active-vs-passive-investing), [Information Ratio](https://finicade.com/glossary/information-ratio)

Source: https://finicade.com/glossary/benchmark