When a security is expected to appreciate at a slower rate than the overall market. The New York Times Financial Glossary
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if a company, investment etc underperforms, it is not as profitable as it should be, or as profitable as similar companies investments etc:
• In keeping with the general trend, the larger services companies were seen to have underperformed compared to smaller ones.
• In Canada, stocks underperformed their British counterparts.
— underperformance noun [uncountable] :
• the group's underperformance in the market
— underperformer noun [countable] :
• The funds have all been underperformers, long-term and short.
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underperform UK US /ˌʌndəpəˈfɔːm/ verb [I or T]
► to operate in a less successful way than other things of the same type: »
The company has underperformed for a long time.
► FINANCE to make less profit than other investments of the same type: »
The company's shares have underperformed the market by 35%.
underperformance noun [U]
► »
The Bank's shares should improve their recent 20% underperformance against the rest of the banking sector.
Financial and business terms. 2012.