What is information ratio and what does It indicate?

When choosing a mutual fund, investors often look beyond returns to understand how effectively a fund manager delivers value. One key metric that helps in this evaluation is the Information Ratio (IR). This powerful tool assesses a fund manager’s ability to generate excess returns compared to a benchmark while accounting for the risk taken. As part of Nivesh ka Sahi Kadam, let’s explore what the Information Ratio is, what it indicates, and how it can guide you toward smarter investment decisions. What is the Information Ratio?

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