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Research Insight - Building Best Practices Benchmarks for Global Equities

Benchmarks are practical tools used by investors at every stage of the investment process, including policy portfolio creation, asset allocation, fund selection, performance evaluation, and product creation. But despite their central role in the investment process, a comprehensive discussion of benchmarking standards or best practices has not been addressed in recent industry literature.

This paper aims to provide a framework for benchmark assessment. The framework is drawn primarily from experience with creating and managing families of global equity benchmarks; however, the practices it outlines can be considered for application to a wide range of asset classes.