Beta
A measure of how much a fund moves compared with its benchmark market.
Beta tells you how sensitive a fund is to its market. A beta of 1 moves in line with the market, above 1 means bigger swings in both directions, and below 1 means smaller swings. A higher beta is not good or bad on its own. It simply tells you how bumpy the ride is likely to be compared with the market.
Questions people ask
What does beta mean in mutual funds?
It measures how sensitive a fund is to its market. A beta of 1 moves with the market, above 1 means bigger swings, and below 1 means smaller ones.
Is a high beta good or bad?
Neither on its own. It just tells you the fund is likely to swing more than the market, up and down, so match it to how much volatility you can stomach.
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