A benchmark index gives the investor a point of reference for evaluating a fund's performance. In all cases where such comparisons are made, Morningstar uses the S&P 500 Index as the basic benchmark for stock-oriented funds, including domestic-hybrid, international-hybrid, and convertible-bond funds. The Lehman Brothers Aggregate Bond Index is used as the benchmark index for all bond funds. This index is a combination of the Lehman Brothers Government, Corporate, Mortgage-Backed, and Asset-Backed Securities indexes. It contains no high-yield issues. S&P 500 (Standard & Poor's 500 Index). Often considered a surrogate for the overall market, this index is composed of the stocks of 500 of the largest companies listed on U.S. exchanges. The S&P 500 Index is market-cap-weighted, which means that the importance of individual stocks in the index depends upon the stock's market value. Therefore, a percentage change in the market value of a large company has a greater impact than an identical percentage change in a smaller company.
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