The Lemon Fool

Hi - I'm making use of the free morningstar X-ray on my portfolio to understand how my current dogs dinner of a portfolio is performing and whether I would be better off just simplifying to a world tracker.

One thing I'm confused by is what the default benchmark is. It is not displayed in the benchmark selection box, but the whole report is compared against this default benchmark, and my performance shows as follows:




I have the ability to change the benchmark but they all seem to be very specific in the list (eg US Large Cap Growth Equity), rather than something like MSCI All World. Wondering if anyone could recommend what morningstar benchmark to use, and explain what the default one is.

My performance over 3 years and 5 years looks OK against the default but I want to be sure I'm making the right comparison!!

Many thanks!

Hi Dingdong.

My educated guess (and that's all it is) is that the default benchmark is context specific and for UK punters its the FTSE100. This (rather old) link suggests this, IMO.

https://www.morningstar.co.uk/uk/news/6 ... doing.aspx

You could verify this by using (say) Trustnet, inputing your portfolio and then comparing to the FTSE100 index within.

Regards, Newroad

i don’t know what the Morningstar benchmark is, but I did look for 5 year annualised returns for some of your investments and as of today, they are consistent with the figures in the report you show, but the figures for the benchmark, 12.9% are ahead of the Vanguard Developed World ETF, the All World including income, or the MSCI World according to the figures from HL by between .4% and 1.3% pa. The FTSE 100 or the All Share fell well short of the benchmark shown.

You have done ok !!

I speculate that each fund analysed may have its own benchmark and the benchmark is a composite of these perhaps, weighted by the holding size ?

Thanks so much for that detailed analysis - great to hear that I'm doing OK!! I think I'll therefore avoid any radical tinkering

I've asked interactive investor to see if they can shed any additional light on how the benchmarking works - will report back if they do.