A benchmark is the market index a fund names as its yardstick, so its returns can be compared with the market it invests in.
Every scheme names a benchmark index in its Scheme Information Document. It is the measure the fund's returns are judged against. A large-cap fund compares itself with an index of the 100 largest companies; a short-term debt fund with an index of short-term bonds.
SEBI asks each scheme to name a first-tier benchmark that reflects its category. A fund may add a second-tier benchmark closer to its own style.
Funds must show their returns next to the total return index version of the benchmark, which counts dividends. A price-only index would make funds look better than they did.
A benchmark is used to see:
Comparing a fund with the wrong index can mislead. A mid-cap fund set against a large-cap index will look better in years when mid caps rise and worse when they fall.
Each fund page has its returns, risk, costs, managers and everything it holds.