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What Is A Mutual Fund's R-Squared?





R-squared measures a fund's movements against its particular benchmark index on a scale ranging from 1 to 100. An S&P 500 index fund will have an R-squared very close to 100 because the fund mirrors the index. A fund with a low R-squared number is moving out of sync with its index.

A high R-squared means the beta on a fund is actually a useful measurement. A low R-squared means ignore the beta.



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