Investors do not focus just on one stock, but in many of them. Moreover, investments usually organise in portfolios with several kinds of assets: stocks, ETF, mutual funds… With such mixture, it is difficult to follow the composite performance, if the investor do not have available the right tool.
For these cases, we have to follow the benchmark. What does it mean? The benchmark is the reference for your portfolio. It is an easy figure to be reported whether your portfolio is on-track or in the opposite way to achieve your performing target.
Let’s have a look at this picture from T-Advisor:
What information do we have available? First of all, we have the performance of our portfolio from the beginning of our investments and from the beginning of the current year. Below it, we have the benchmarks from the indexes where we have assets in our portfolio and… the smart benchmark.
Smart benchmark is a functionality provided by T-Advisor for its users. You do not have to calculate, because T-Advisor automatically shows the figure. What information do you get from it? It mixes the different indexes benchmarks in the proportion you have in the portfolio and obtains a composite benchmark. So, you can compare if you are on-track or far from the performance you are looking for and from the market trend.
But you get still more in T-Advisor with smart benchmark. You can also compare the portfolio risk with the benchmark risk, comparing performance, volatility, value at risk and shape ratio. These figures report accurately to take decisions about your own investments: am I wrong with my investments? What should I change?
Finally, it is to underline that T-Advisor has developed this tool so that every user has at his or her disposal an automatic reference to compare the evolution of his or her portfolio and take the best decisions to maximize the investments.