A benchmark is a tool against which investment managers measure the performance of their investments.
A benchmark will most often be a relevant index, representing the market, sector, or industry in which the investment sits. This enables the investment manager to track how their offering is doing in relation to the broader grouping.
The Morningstar category is often used as a benchmark for funds in the FPIL factsheets available through our interactive fund centre research tool. The category is a grouping of funds with similar objectives and behaviours, so is useful for comparative purposes.