Information Ratio – Excel Template

Ivan Kitov
Ivan Kitov

The information ratio measures the portfolio’s risk-adjusted return over a benchmark. It tracks the consistency of portfolio managers when generating an excess return. To calculate the metric, you divide the active return by the tracking error. In the nominator, you see the difference between the portfolio return and the index return (the active return), and in the denominator, you have the standard deviation of the active return, also known as the tracking error.

This open-access Excel template is a useful tool for statisticians, financial analysts, data analysts, and portfolio managers.

Information Ratio is among the topics included in the Portfolio Management module of the CFA Level 1 Curriculum. Gain valuable insights into the subject with our Portfolio Management course.

You can explore other related templates such as—Sortino Ratio, Sharpe Ratio, and Treynor Ratio.