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.[1]

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[2]
  • The asset managers stay concentrated to tactical asset allocation and fund (security) selection
  • No volatility control over time[3]
  • Without volatility constraints over a long period the investor is expected to get higher returns

See also[edit]


  1. ^ Chong, James, and G. Michael Phillips. "Low-(Economic) Volatility Investing."The Journal of Wealth Management 15.3 (2012): 75-85.
  2. ^ Leibowitz, Martin L., Simon Emrich, and Anthony Bova. Modern Portfolio Management: Active Long/Short 130/30 Equity Strategies. Vol. 539. John Wiley & Sons, 2009.
  3. ^ Blitz, David C., and P. van Vliet. The volatility effect: lower risk without lower return. No. ERS-2007-044-F&A. Erasmus Research Institute of Management (ERIM), 2007.

Further reading[edit]

  • Hendry, John, et al. "Responsible ownership, shareholder value and the new shareholder activism." Competition & Change 11.3 (2007): 223-240.
  • Ladekarl, Jeppe, and Sara Zervos. "Housekeeping and plumbing: the investability of emerging markets." Emerging Markets Review 5.3 (2004): 267-294.
  • Leibowitz, Martin L., Simon Emrich, and Anthony Bova. "Modern Portfolio Management." (2008).