Benchmark (also used in German; rarely a reference value)

In general, a benchmark as a “yardstick” (standard or average by which similar items can be compared), namely, in relation to investments, a – comparative portfolio (benchmark portfolio) or – an index that measures various target variables, especially investment return, liquidity and risk. The benchmark is used to assess the performance of a portfolio or a fund (the benchmark is used by less well-performing players as a target to achieve). – Under Basel-II, banks are required or recommended to have certain benchmark risk weights. – See Bogey, cost efficiency, tracking error. – Cf. Deutsche Bundesbank’s Monthly Report of April 2001, p. 38 and the ECB’s Annual Report 2001, p. 220 f., BaFin’s Annual Report 2013, p. 79 f. (specifications for all those involved in determining benchmarks).

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