Which is a positive aspect of custom-security based benchmarks?

A positive aspect of custom-security based benchmarks is that they can be designed to satisfy specific properties and validity criteria relevant to a particular investment strategy or portfolio. Unlike traditional benchmarks, custom benchmarks may reflect the unique risk and return characteristics of the assets being managed, aligning closely with the investment objectives and constraints of the portfolio.

The ability to tailor benchmarks ensures that they can be more effective in evaluating performance relative to the strategies being employed, such as tracking error, outcome consistency, or risk-adjusted returns. This customizability is a significant advantage when measuring the success of a fund manager or investment strategy.

While other options suggest benefits, they either present misconceptions (like transparency and ease of construction) or limitations (such as being restricted to publicly available securities) rather than the robust adaptability and relevance that custom benchmarks provide.