Its purpose is to help investors evaluate the consistency of returns, i.e. whether a fund's performance record is attributed to consistent returns throughout the years or is the result of a fluke. Its purpose is to help investors evaluate the performance of a fund compared to its peers and the index. However, average rates of return suffer from a major drawback in that long-term results may conceal unpleasant episodes in a fund's history. For example, the Average Performance Graph does not tell whether long-term returns are attributed to a solid, consistent record, or to a strong performance during a short time interval. To find out which is the case, investors should concurrently examine the Annual Performance Graph.
Beta is expressed in percentage terms.
Beta is only indicative for funds with a relatively high correlation with the index. In other words, the higher R-Squared is, the more relevant the fund's Beta. Default occurs when companies with weak financial situations have difficulty meeting their debt obligations, in which case bondholders face the risk of losing their principal investment. Default risk is higher during periods of economic recession or slowdown. It shows the trend of each fund's MER compared to asset size.