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VERIFIEDMint Money·neutral

Understanding Information ratio in mutual funds: Calculation, formula and significance

AI Summary
  • ·The information ratio measures a fund manager's excess returns over a benchmark index against the active risk taken.
  • ·It is particularly useful for analyzing the performance of equity mutual funds, index funds, and ETFs.
  • ·The ratio highlights the manager's skill in generating returns beyond the benchmark.
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