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Mutual fund education

Mutual Fund Education

Mutual Fund-amentals

Daniel Cross Nov 23, 2015



Know Your Grading Tools


Pouring over the mandatory prospectus a mutual fund sends you any time you invest probably won’t make much sense and may feel like a huge time-sink unless you already know what to look for. However, you can use a few valuations unique to mutual funds to quickly compare and get a feel for its performance on your own.

Any mutual fund “look up” should have a section that lists some ratios and figures. The common four you’ll see are: R-squared, Beta, Alpha, and Treynor ratio. Let’s take a look at what these mean and how you can use them to quickly get a feel for that mutual fund’s performance.


R-Squared



Beta



Alpha



Treynor ratio



The Bottom Line


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