Blog | Product features

Benchmark your portfolio against any stock, ETF or fund

by Stephanie Stefanovic, Content Manager, Sharesight | Aug 18th 2022

Investors using Sharesight can benchmark their portfolios against any of the 240,000+ global stocks, ETFs, funds and unit trusts that Sharesight currently supports. This allows investors to compare and contrast the performance of their portfolio against a world of investments, making it easier than ever to make informed investment decisions. To learn more about the importance of benchmarking your portfolio and how you can do this with Sharesight, keep reading.

Benchmark your portfolio

What is benchmarking?

Typically used by fund managers, a benchmark is a standard against which the performance of a fund (or portfolio of assets) can be measured. In many cases, this benchmark will be in the form of a market index that approximately reflects the asset allocation of the fund or portfolio. This gives insight into the value of a fund or fund manager, as investors can clearly see whether they are "beating the market".

Benchmarking your investment portfolio

Individual investors can benchmark their personal investment portfolio in much the same way as a fund manager might choose a benchmark for their fund. This is made possible with Sharesight’s benchmarking tool, which allows investors to benchmark their portfolio against any one of the 240,000+ stocks, ETFs, funds and unit trusts supported by Sharesight.

Why should investors use a benchmark?

Benchmarking your portfolio can give you a good indication of your portfolio’s performance and offer deeper insight into the success of your investing strategy. In particular, it can help determine whether your returns are the result of broad market trends or your own investing decisions. For example, if you find that your portfolio often diverges from its benchmark, this would suggest that your returns are driven by your individual investing decisions, rather than broad market trends. If your portfolio is consistently underperforming compared to its benchmark, this also suggests that you may wish to consider investing your money into the benchmark in question, rather than relying on your existing investment strategy.

How to choose a benchmark for your portfolio

While there are many different benchmarks you could choose for your portfolio, index-tracking ETFs tend to be a common choice for investors. This is because they take into account all the inner workings of a real portfolio, including fees, dividends and any franking credits that may apply. If benchmarking a portfolio against an ETF, investors must simply consider whether the ETF reflects the asset allocation or investing strategy of their portfolio. For example, a US investor with a portfolio heavy in tech stocks might choose a NASDAQ 100 Index ETF as a benchmark for their portfolio.

How to add a portfolio benchmark in Sharesight

To add a benchmark to your Sharesight portfolio, simply navigate to your portfolio’s Overview page, scroll down to the Summary tab and click "Add a Benchmark". You will be prompted to select a commonly used benchmark or search for a benchmark from any of the 240,000+ investment instruments supported by Sharesight.

Sharesight Add a benchmark

To search for a portfolio benchmark, type in the ticker code of the stock, ETF, fund or unit trust you wish to track against your portfolio.

Once you have added a benchmark to your portfolio, you will see a comparison of your portfolio’s total return against the benchmark, broken down by capital gains, dividends and currency gain. You can also see a visual representation of your portfolio’s performance against the benchmark by selecting "Graph Performance Index" in the dropdown menu above your performance chart. This is a quick and easy way to track where your portfolio has followed or diverged from the benchmark over time.

Sharesight benchmark portfolio ETF

How benchmarking works in Sharesight

Sharesight’s benchmarking tool assumes a common investment amount and start date to calculate the benchmark’s performance. In the example above, we’ve selected a time period of "since first purchase", which will set the benchmark start date to the date of the first holding purchased in the portfolio – though there are other options available.

To make the most of the benchmarking tool, make sure to read our step-by-step guide to benchmarking as well as our Help section on how to interpret the return index graph.

Upgrade today to benchmark your portfolio

Benchmarking is available to all Sharesight users on Starter, Investor, Expert and Professional plans. To access this feature, upgrade today!



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