Good risk-adjusted return

Risk-adjusted return values (information ratio) above 0.5 for individual years is usually considered a good result. The risk-adjusted return has been good since the inception of the current management organization. The information ratios are generally high for the different management units.

On average the information ratio for the Tactical management amounted to 0.8 (1.3) over the past three years.

Information ratio

The information ratio is used to measure risk-adjusted return. The measure describes the annual excess return achieved in relation to the active risk taken.

Daily data has been used in the calculation of AP4’s risk-adjusted returns. Daily data is a more conservative calculation method as it produces a lower information ratio than if, for example, weekly or monthly data was used.