8/28/2023 0 Comments Equity benchmark meaningThis is a large-cap fund and thus the index chosen is also for large caps. This comparison against the benchmark gives an insight into how well the fund manager has invested your fund and managed it over time.įor example, Aditya Birla Sun Life Focused Equity Fundthe plan will be compared against Nifty 100. As per the benchmark, the allocation of the funds for yearly or quarterly performances is compared. It is an index like Nifty 50 or Sensex, which is taken as a benchmark of the mutual fund. What is Benchmark?Ī benchmark can be referred to as a standard against which a fund’s performance is measured. SEBI made it mandatory so that the investors can make informed decisions and compare their fund’s performance against a certain index, which is used as the comparison for the fund. On January 4th, 2012, SEBI directed all of the mutual fund houses to specify the benchmark for every scheme they have. The fund you are investing in will perform in a certain way and to understand whether it performed well or not, you need to know about the benchmark. Many investors have no idea about the significance of the benchmark in a mutual fund and how to utilize it. While investing in Mutual Funds, investors might come across a term called Benchmark or Benchmark index but tend to ignore it. Same stands for mutual fund returns as well. The comparison with others in a similar sphere gives a sense of progress towards the better or worse achieved.
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