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Mutual Fund Performance Evaluation

A mutual fund with a beta of 1.1 has outperformed the S&P500 over the last 20 years.

Does the mutual fund manager; have had superior stock selection ability; have had superior asset allocation ability; have had superior timing ability; or may or may not have outperformed the S&P500 on a risk adjusted basis?

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Beta is a measure of the volatility of a security (or portfolio) relative to the market (however one defines that term). Volatility is another term for "risk". We would expect ...

Solution Summary

A mutual fund with a beta of 1.1 has outperformed the S&P 500 over the last 20 years.

Does the mutual fund manager (a) have had superior stock selection ability; (b) have had superior asset allocation ability; (c) have had superior timing ability; or (d) may or may not have outperformed the S&P 500 on a risk adjusted basis?

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