By Gabriele Denaro · Published 16 July 2026 · Updated 6 October 2026
Say your portfolio gained 8% last year. That sounds good until you learn that a broad stock index gained 15%. Or the reverse: it sounds poor until you learn the index lost 10%. A benchmark is a reference return, often a broad index, that answers one question: compared with a plain, low-effort alternative, how is my actual approach doing? Without one, a good year for the market and a good year for your decisions look the same.
A benchmark only makes sense for money that behaves like it. A portfolio of stocks can be compared with a stock index. A bond portfolio needs a bond reference. Liquid savings are better judged against inflation or the rate of a deposit account, and a pension fund with its own rules does not fit a stock index at all. In Patrimony you can pick a preset benchmark or define your own name and return. The dashboard compares your year to date with it, and Analysis shows the longer comparison.
An index return has no costs, taxes or currency effects, while your return has all three. A gap of one or two points against the index may therefore be just the price of owning it through a fund or a broker. Look at the size and persistence of the gap, not at a single reading.
Short stretches of lagging are normal even for sound approaches, and short stretches of leading prove little. Three to five years or more starts to tell you something. A single month tells you almost nothing, which is why Patrimony compares cumulative growth over time and not one month in isolation.
The result is information, not an instruction. If you lag the benchmark by a lot over years, ask why: costs, concentration in a few holdings, frequent switching, or simply a different level of risk. If you lead, ask whether you took more risk to get there. Either answer helps you decide what to keep doing.
General educational information, not personal financial, tax or legal advice. It may be incomplete or out of date. Terms of use.