Beta in mutual funds

Tue, 12 May 2026 00:00:00 +0000

Beta (\(\beta\)) is a measure of a mutual fund’s systematic risk, its sensitivity to movements in its benchmark index relative to the benchmark’s own movement. A beta of 1.0 means the fund historically moves in perfect proportion with its benchmark. A beta above 1.0 indicates an amplified response (the fund falls more in a downturn and rises more in an upturn), while a beta below 1.0 indicates a dampened response. Beta of zero would imply no correlation with the market at all.

Treynor ratio in mutual funds

Tue, 12 May 2026 00:00:00 +0000

The Treynor ratio (also called the reward-to-volatility ratio or Treynor measure) is a risk-adjusted performance measure that divides a fund’s excess return (return above the risk-free rate) by its beta , a measure of systematic market risk, rather than by total standard deviation as in the Sharpe ratio . Developed by Jack Treynor in 1965, it is based on the Capital Asset Pricing Model (CAPM) framework and is appropriate when the mutual fund is evaluated as a component within a larger, well-diversified portfolio.

Beta on WebNotes

Beta in mutual funds

Treynor ratio in mutual funds