Investors want to know whether a mutual fund beat the S&P 500 but also want to know how comparatively risky it was. A measure for this is the Beta ( “ known as market risk”).
A Beta greater than 1 indicates more risk than the market and vice versa.
Beta helps to understand the concepts of passive and active risk. A money manager employing a passive management strategy can attempt to increase the portfolio return by taking on more market risk ( i.e. a Beta greater than 1) or alternatively decrease portfolio risk ( and return) by reducing the portfolio beta below 1.