RISK & REWARD

Physician's Money Digest, April15 2003, Volume 10, Issue 7

How can you tell if your mutualfund is riskier than similar funds?Measuring risk by a commonlyused yardstick, the fund's investmentstrategy is often misleading.The Lipper-Barra Mutual FundRisk Factor aims to fill the gap byanalyzing the risk potential for eachof a fund's stock holdings to comeup with the overall measure of fundrisk. Lipper-Barra then assigns, on ascale of 1 to 100, 3 risk factors—one that measures risk relative to allmutual funds, one relative to all sectorfunds, and one relative to otherfunds in the fund's specific sector.Lipper-Barra offers some surprises.A seemingly conservativefund like Gabelli Blue Chip Value-AAA Fund rates a 99, which meansthat the fund is riskier than 99% ofall other equity funds, while VanguardHealth Fund, in the volatilehealth care sector, rates a 3. Formore information, call 877-955-4773 or visit www.barra.com orwww.lipperweb.com.