Blended Benchmarks in Investment Proposals

The Investment Proposal PDF simulates the Historical Return of your proposed portfolio going back 10-years using the Initial value entered. Additionally, it plots portfolio performance against a relative Blended Benchmark:

  • The Blended Benchmark is comprised of market indices representing each specific asset in the same proportion as the proposed portfolio.
  • The Blended Benchmark is designed to provide insight in the periodic return behavior and the resulting end value of the proposed portfolio assets relative to the blended benchmark indicies over a specified period.

blended.PNG

For example:

  • If your client is equally diversified Canadian and US and equities, only using a Canadian index would not be a true measure of asset performance relative to all markets.
  • Rather, you may want to use an average of the TSX Composite and S&P 500 Index combined.

See the following for more details on how a Blended Benchmark works with simulated portfolio valuation:

https://www.theglobeandmail.com/globe-investor/personal-finance/how-to-create-your-own-weighted-average-benchmark/article624919/