Unknown Indicator
Information Ratio In A Nutshell
This begins the endeavor into the weeds of finding which investment is going to fit your current portfolio. Beyond benchmark performance, you want to keep in mind the expense ratio and other costs associated with the particular. Reading the information ratio is simple, the higher the number the better the product has done against the respective benchmark.
With the many different products out there, people are always asking how the particular fund is giving them an edge in the market. More specifically with ETF’s and mutual funds, many wonder how they are beating the benchmark and how often they are doing so. The information ratio seeks to give us an answer to this question by measuring how a portfolio fairs compared its respective benchmark.
Closer Look at Information Ratio
The number itself may not tell you the whole story so it is critical that you dig a little deeper. As an investor, you want to understand the risks and how the company is achieving outperformance. It could be from leveraging or other practices, so it is crucial that those align with your investing views.
Using the information ratio a reasonable way to begin narrowing your search for potential investments. You may also find that the sharp ratio is another effective way to find the appropriate portfolio to invest in. Pick apart the portfolio understanding the reason for the holdings and what is involved with the selection process. Also look at the track record of the manager and see if they have a history of success. All of these factors are important to consider when looking for a particular fund.
Other Indicators
All Technical Analysis
Explore Investing Opportunities
You can quickly originate your optimal portfoio using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did you try this?
Run Headlines Timeline Now
Headlines TimelineStay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |
| All Next | Launch Module |
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |