The Why and How of Mutual Fund Standard Deviations

Kochmann, Ladd; Goodwin, Randy
June 2004
American Business Review;Jun2004, Vol. 22 Issue 2, p26
Academic Journal
The aim of this article is to examine whether mutual fund standard deviations are relevant when funds eliminate the unsystematic component of total risk. Using values reported on the Web sites of Fidelity Investments and Morningstar Inc., the authors found that Fidelity's standard deviations were larger than Morningstar's counterparts for 22 of the 25 funds with disparities between sources as large as 48.7 percent, 32.1 percent, and 28.3 percent. The reason for the differences would seem to lie in how the standard deviations are calculated, or more precisely, how they are annualized.


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