In general, this means to do better than some particular benchmark. Mutual Fund XYZ is said to outperform the S&P500 if its return exceeds the S&P500 return. However, this language does not take risk into account. That is, one might have a higher return than the benchmark in a particular year because of higher risk exposure. Outperform is also a term used by analysts to describe the prospects of a particular company. Usually, this means that the company will do better than its industry average. Related: underperform.
Nearby TermsOut-of-favor industry or stock Out-of-the-money option Outperform Outright quote Outright rate
Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University