Why does a benchmark need to be investable if it is only used for comparison?

Investability matters because a benchmark should represent a realistic passive alternative to the active strategy. If the benchmark cannot be held, replicated, or accessed under realistic conditions, it may not be a fair opportunity-cost comparison.

For example, a private-asset benchmark built from stale appraisals may be measurable, but it may not represent an investable portfolio with current transaction prices. Similarly, a benchmark containing securities outside the manager's legal or policy constraints can make the manager look too risky or too conservative for reasons unrelated to skill.

Measurable answers whether the return can be computed. Investable answers whether the comparison is economically meaningful.