To calculate a Mutual Fund's excess return, Morningstar uses as a reference the yield of

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Morningstar uses the yield of three month Treasury bills as a reference when calculating a Mutual Fund's excess return. This is because Treasury bills are considered to be a risk-free investment, meaning they have no credit risk and very low interest rate risk. Thus, the excess return of a Mutual Fund is compared to the safe return of the Treasury bills, giving investors an idea of how much additional return they are getting by investing in the fund.

To Calculate a Mutual Fund's Excess Return, Morningstar Uses as a Reference