TL;DR
You should compare your portfolio against suitable benchmarks like BIST 100, factor portfolios, or inflation. Choosing the right benchmark helps you evaluate your portfolio performance and manage risks.
9 min readBIST 100, factor portfolios, or inflation? Choosing the right benchmark is key to portfolio evaluation.
What Is It?
For detailed information, see our portfolio management guide. Consider alongside diversification and rebalancing strategies.
Application on BIST
Use our stock screener and portfolio simulator to apply this strategy on BIST. Measure risk-adjusted performance with the Sharpe ratio.
Test your portfolio in the simulator.
Go to Simulator →Related articles: Portfolio Management Guide, MPT, Diversification, Rebalancing.
Frequently Asked Questions
What is a portfolio?
A portfolio represents the total of various financial assets owned by an investor, such as stocks, bonds, and real estate. For example, an investor may hold both industrial and banking stocks in their portfolio.
What is a benchmark?
A benchmark is a reference point used to measure investment performance. For instance, the BIST 100 index can be used as a benchmark reflecting the performance of the largest 100 companies in Turkey.
How is a benchmark selected?
The choice of benchmark depends on your investment goals. If your aim is to outperform the market average, using a common index like the BIST 100 makes sense.
How is performance evaluation conducted?
Performance evaluation is done by comparing your portfolio's return against the chosen benchmark. For example, if your portfolio yields 10% above the BIST 100 index, this indicates a positive performance.
How is risk management achieved?
Risk management is achieved by comparing your portfolio with a benchmark. For example, by using the BIST 30 index as a benchmark, you can understand how sensitive your portfolio's stocks are to market fluctuations.
This content does not constitute investment advice. Past performance is not a guarantee of future results. Make your investment decisions based on your own risk profile.
