Set out the main kinds of asset-based benchmark

Asset-based benchmarks range from simple to tailored. An absolute return target, such as 7% a year or cash plus 3%, is easy to state but says nothing about the market opportunity. A manager universe or peer group median is not specified in advance, is not investable and suffers from survivorship bias. Broad market indexes are transparent and investable but may not match the manager's style; style indexes fix that, although definitions differ across providers. Factor-model benchmarks match the manager's systematic exposures but can be hard to interpret. Returns-based benchmarks derive a style mix from the manager's return history, and custom security-based benchmarks are built from the manager's own universe and weighting, fitting best but costing the most to build and maintain.