What is the Information Ratio?
The Information Ratio (IR) measures how much excess return a portfolio manager generates relative to a benchmark, per unit of the risk taken to achieve that excess return (tracking error).
The formula
Information Ratio = (Portfolio Return − Benchmark Return) / Tracking Error. A higher IR indicates the manager consistently added value relative to the benchmark rather than getting lucky with a few large bets.
This calculator is for general investment-analysis education, not investment advice.
Last reviewed August 2026