Information Ratio (IR)

  • On 18th January 2025, the Securities and Exchange Board of India (SEBI) has directed mutual funds to disclose the information ratio (IR) of a scheme along with performance disclosure on a daily basis to enhance transparency and aid investor decision-making.
  • IR measures the performance of a portfolio or financial asset in relation to a benchmark, considering the volatility of its returns.
  • It helps assess how well an asset is doing compared to a market index like Nifty 50 or other relevant benchmarks.
  • The Information Ratio is calculated using the following formula: IR = (Portfolio Rate of Returns – Benchmark Rate of Returns) / ....
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