Information Ratio

The Information Ratio of a manager series vs. a benchmark series is the quotient of the annualized excess return and the annualized standard deviation of excess return.

    Information Ratio = (AnnRtn(r1, ..., rn) - AnnRtn(s1, ..., sn)) / AnnStdDev(e1, ..., en)


    r1, ..., rn = manager return series
    s1, ..., sn = benchmark return series
    e1, ..., en = r1 - s1, ..., rn - sn

The Information Ratio measures the consistency with which a manager beats a benchmark.

To view our quick tip video on Information Ratio, click the following link:

Informa Investment Solutions is part of the Business Intelligence Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.