Benchmarking portfolio is all about perspective
Recently, mutual funds were told to compare their performance with total return index against Nifty or Sensex, as these take into account only the price of the stocks and not the dividend payout
Performance of a mutual fund scheme or PMS portfolio is assessed with reference to a benchmark. There are various benchmarks available; the designated benchmark is the one with nearest correspondence with the composition of the portfolio. However, this comparison with a benchmark is never perfect. It is to give an indication that if you were invested in the benchmark portfolio, how much you would have earned.