1. What is the Range Fund Calculation?

The Range Fund calculation measures the volatility of a mutual fund by comparing the difference between its highest and lowest Net Asset Values (NAV) to its average NAV. This helps investors understand the expected range of returns.

2. How Does the Calculator Work?

The calculator uses the Range Fund formula:

Where:

• \( NAV_{high} \) — Highest Net Asset Value ($)
• \( NAV_{low} \) — Lowest Net Asset Value ($)
• \( NAV_{avg} \) — Average Net Asset Value ($)

Explanation: The equation shows the relative range between the highest and lowest NAV values compared to the average NAV, indicating the fund's volatility.

3. Importance of Range Fund Calculation

Details: Understanding a fund's range helps investors assess risk tolerance and potential return variability. A higher range indicates greater volatility.

4. Using the Calculator

Tips: Enter the highest, lowest, and average NAV values in dollars. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What does a high range value indicate?
A: A high range value suggests the mutual fund has experienced significant price fluctuations, indicating higher volatility.

Q2: How often should I calculate this range?
A: It's useful to calculate periodically (monthly/quarterly) to monitor changes in a fund's volatility pattern.

Q3: What's considered a "good" range value?
A: This depends on investor risk tolerance. Conservative investors may prefer lower ranges (<0.1), while aggressive investors may accept higher ranges.

Q4: Can this be used to compare different funds?
A: Yes, comparing range values can help assess relative volatility between different mutual funds.

Q5: Does this account for fund performance?
A: No, this only measures price range volatility, not absolute performance or returns.