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Finance Dictionary and Glossary of Investment Terms
Category Average Return
Definition 1.
Calculated by adding the returns of all mutual funds in a particular category and dividing the result by the number of such funds. This gives an indication of how any one fund is performing versus comparable funds.Category average return provides an important benchmark for fund comparisons, since it compares apples to apples and oranges to oranges. There is little point in comparing the returns of a domestic stock fund with a municipal bond fund, for example.
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