Choosing a benchmark is choosing what counts as doing nothing. A global equity fund measured against a domestic large-cap index will look skilled or hopeless depending mostly on currency and country effects rather than on stock picking.
A fair benchmark has four properties: it is specified before the period starts, it is investable at low cost, its constituents and weights are public, and it reflects the same risk exposures the strategy runs. A 60/40 portfolio needs a 60/40 blended benchmark, not an equity index.
Match the return basis too. Comparing a fund's after-fee total-return against a price-only index flatters the index; comparing it against a gross-dividend index flatters nothing and penalises the fund for withholding tax it could never avoid. See tracking-difference and performance-reporting.
Related: alpha, beta, tracking-error, tracking-difference, index-construction, performance-reporting