When an investor takes higher risk, ideally, he should get higher returns.
The same holds true for your mutual fund manager To evaluate whether the extra risk that a fund manager took has resulted in higher returns, look at the Sharpe Ratio of the scheme The Sharpe Ratio is the risk-adjusted return of a portfolio. A fund with a higher Sharpe Ratio is considered superior compared to its peers If two funds have similar returns, opt for one with a higher Sharpe Ratio, as it shows that the scheme’s excess returns are due to smart investment decisions Don't take a call on a ...
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