The market index that best correlates to the performance of a given fund in the most recent 36 months. The best fit index is the most appropriate passively managed collection of stocks against which to measure the performance of a given mutual fund. The index also gives some idea of what role a given fund might play in your portfolio. A fund whose best fit index is JSE Gold, for instance, has a very different function from one whose best fit is the S&P 500.To determine the best fit index of a mutual fund, Morningstar regresses the fund''s monthly excess returns against monthly excess returns of several well-known market indexes. Best fit signifies the index that provides the highest R-squared. The following indexes are regressed against each equity fund: JSE Gold; MSCI Pacific, MSCI Pacific ex Japan, MSCI World ex U.S., MSCI EASEA, MSCI Europe, Russell 2000, S&P MidCap 400, MSCI All Country, Wilshire 4500, Wilshire REIT, S&P 500, LB Long-Term Treasury, and FB High-Yield. The following indexes are regressed against each bond fund: Russell 2000, MSCI All Country, Wilshire 4500, S&P 500, LB Long-Term Treasury, SB World Government, LB Corporate, LB Municipal, LB Government, FB High-Yield, LB Aggregate, LB Intermediate-Term Treasury, LB Mortgage-Backed.