By: Rick Walter What is a benchmark and how does it help you or your ETF Fund? A benchmark is a standard against which the performance of a security, mutual fund or investment manager can be measured. Generally, broad market and market-segment stock and bond indexes are used for this purpose. For example, "when evaluating the performance of any investment , it's important to compare it against an appropriate benchmark. In the financial field, there are hundreds of indexes that analysts use to gauge the performance of any given investment including the S&P 500 , the Dow Jones Industrial Average , the Russell 2000 Index and the Lehman Brothers Aggregate Bond Index ." All ETFs are built with a benchmark in mind . Does this make ETFs easier to construct and market? Maybe, according to the total ETF funds chart I have constructed show ETFs proliferating at break neck speed.
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