Custom Benchmarks
Instructions
If the standard benchmarks in PortfolioAnalyst do not suit your needs, you can create custom versions.
What is a Custom Benchmark?
You can combine and weight up to three standard benchmarks to build new ones. The return formula for a custom benchmark is calculated as:
Σ(Benchmark Weight X Benchmark Return)
In the example below, a custom benchmark has been created by combining three existing standard benchmarks:
| Index | Weight | Return |
|---|---|---|
| Russell 2000 | 40% | 20.00% |
| S&P 500 | 40% | 10.00% |
| S&P US High Yield Corporate Bond | 20% | 6.00% |
Based on the weights and returns of each component benchmark, the return for this custom benchmark is 13.20%, calculated as:
(.40 x .20) + (.40 x .10) + (.20 x .06) = 13.20%
Observe the following guidelines when creating custom benchmarks:
- You can only use standard benchmarks to create custom benchmarks (ie, other custom benchmarks cannot be used).
- You can add any number of standard benchmarks to custom benchmarks, as long as the total weight equals 100%.
- Each standard benchmark included in a custom benchmark must have a weight between 0 and 100. No standard benchmark in a custom benchmark can have a weight of either 0 or 100.
- You can add multiple standard benchmarks at a time to a custom benchmark.
Additional Resources
Learn About PortfolioAnalyst Setting Custom Benchmarks at IBKR Campus
Learn About PortfolioAnalyst for Advisors at IBKR Campus