What outcome do performance benchmarks primarily facilitate for investors?

Performance benchmarks are essential tools for investors as they allow for the evaluation of investment performance against a standardized reference point or a group of comparable investments. By comparing the returns of a portfolio against a benchmark, investors can assess how well their investments are performing relative to similar assets or the market as a whole.

This evaluation enables investors to understand whether the returns generated are due to skillful management or simply a reflection of market movements. It helps in identifying areas where performance may need improvement and allows for more informed decision-making regarding investment strategies.

In contrast, streamlining the investment purchasing process focuses on the efficiency of transactions rather than performance assessment. Gaining insight into portfolio risks exclusively is more about risk management rather than performance evaluation. Maximizing investment opportunities within the same sector is aligned with identifying potential growth but does not directly relate to measuring how well an investment strategy is executing against an established benchmark. Thus, the primary outcome of performance benchmarks is to facilitate the evaluation of investment performance against peers.