The Information Ratio of a manager series vs. a benchmark series is the quotient of the annualized excess return and the annualized standard deviation of excess return.

    Information Ratio = (AnnRtn(r₁, ..., r_n) - AnnRtn(s₁, ..., s_n)) / AnnStdDev(e₁, ..., e_n)

where:

    r₁, ..., r_n = manager return series
    s₁, ..., s_n = benchmark return series
    e₁, ..., e_n = r₁ - s₁, ..., r_n - s_n

The Information Ratio measures the consistency with which a manager beats a benchmark.

To view our quick tip video on Information Ratio, click the following link:  http://www.styleadvisor.com/sites/default/files/quick_tip_video/info_rat....