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About Mutual Fund Benchmarks

Going by its literal definition with respect to financial investments, a benchmark is a standard against which you can measure the performance of a mutual fund, security or an investment manager. In the context of mutual funds per se, it’s a point of reference that tells you about a mutual fund’s performance as against the market and its peers. SEBI (Securities and Exchange Board of India) has made it mandatory for all mutual fund houses to declare their respective benchmark indices.

Hence, all mutual fund schemes, whether equity or debt funds, select and declare their own benchmarks. For instance, Nifty and BSE Sensex are the most commonly used benchmarks for large cap equity mutual funds in India. Some of the other regularly used benchmarks for equity funds are Nifty 500, Nifty Next 50, Nifty 100 etc.

Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.