Benchmark-driven investment strategy

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 such as the 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

• Liability-driven investment strategy
• Financial risk management § Investment management