This modern portfolio theory statistic measures a fund's volatility relative to a broad benchmark, commonly the S&P 500 index. Although betas are normally associated with stocks, they are also used for bonds.

Beta is typically calculated on the basis of monthly returns over the past three years. A fund that seesaws in perfect sync with the market has a beta of 1.0. Portfolios that are more volatile relative to the S&P 500, such as aggressive-growth funds, have betas greater than 1.0; more conservative investments, such as utility funds, have coefficients of less than 1.0. Beta readings for gold, international, and other funds that move independently of the S&P 500 are not meaningful, so it's wise to check the standard deviation along with beta when you're examining volatility.