Physician's Money DigestFebruary28 2003
Volume 10
Issue 4


A measure of a mutual fund'smarket risk is the fund's beta coefficient, a statistical look at volatility relativeto the S&P 500. If a fund's betais 1.0, you would expect it to matchthe ups and downs of the S&P.A betahigher than 1.0 means the fund mayhit higher highs and lower lows thanthe overall market. A lower betameans the fund may be less sensitiveto market swings. For instance, afund with a beta of 2.0 can beexpected to rise or fall by 20% whenthe S&P 500 gains or loses 10%.Youcan get a fund's beta from A beta measuresmarket risk, not fund-specific risk,which sector funds can be particularlyvulnerable to.

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