The standard where the fund’s performance is measured. It also tells the fund manager, and essentially the investor, what level of return the fund hopes to achieve. Comparison to the benchmark shows whether or not the fund is achieving return expectations. For example, an equity fund’s 1 year return is 10% versus the PSEi benchmark returning 8% within the same period. This tells the investor that the equity fund is doing 2% better, therefore, exceeding expectations.