Total portfolio benchmarking

January 10, 2019

Total portfolio-level benchmarking for institutional investment pools can be approached in a variety of ways, based on which goals fiduciaries are attempting to achieve with each comparison.

There are different types of benchmarks that can be used to accomplish specific goals. Portfolio-level benchmarks are typically based on (1) an institutional portfolio’s asset allocation, e.g., an asset-weighted policy or dynamic policy benchmark, (2) an investable, passively-managed index, such as a 60/40 equity and bond mix, (3) a comparison to institutional peers, and/or (4) an institutional financial objective of the portfolio’s returns, e.g., a specified nominal or real (inflation-adjusted) rate of return.