Skip to Content
Canadian Videos

The Morningstar Dictionary: Beta

Beta gives you a sense of how volatile an investment has been, compared to a benchmark.

Wendy Stein: Beta is one of the Modern Portfolio Theory statistics reported by Morningstar. Beta, along with the other MPT statistics, can help investors assess the risk and return characteristics of investments. You can find them in the Risk section of a fund or ETF's Morningstar Report on

Risk is made up of two major components: systematic risk and unsystematic risk. Unsystematic risks are those that are limited to either a specific company or industry sector. For example, failure to secure government approval for a new drug could hurt a specific pharmaceutical company's profitability and the value of its stock price but would not necessarily impact the value of other pharmaceutical companies' stock prices.

To view this article, become a Morningstar Basic member.

Register for Free