Harman Patil (Editor)

Benchmark driven investment strategy

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Benchmark-driven investment strategy is an investment strategy where the target return is usually linked to an index or combination of indices of the sector or any other like S&P 500.

With the Benchmarks approach the investor chooses an index of the market (benchmark). The goal of the fund manager is to try to beat the index performance-wise.

  • The strategic asset allocation is usually delegated to the benchmark chosen
  • The asset managers stay concentrated to tactical asset allocation and fund (security) selection
  • No volatility control over time
  • Without volatility constraints over a long period the investor is expected to get higher returns

    • References

    Benchmark-driven investment strategy Wikipedia
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