Sebi asks mutual funds to disclose information ratio of schemes
In a circular, Sebi has asked mutual funds to disclose the information ratio of a scheme portfolio on their website, along with performance disclosure, on a daily basis.
)
To bring more transparency in disclosures made by AMCs and aid better decision-making by investors, Sebi on Friday directed mutual funds to disclose the information ratio (IR) of a scheme along with performance disclosure.
Further, disclosure of IR, a financial metric to measure the Risk-adjusted Return (RAR) of a scheme portfolio, will be applicable only for equity-oriented schemes.
"Considering the significance of volatility of performance in determining the suitability of MF schemes, the information ratio is an established financial ratio to measure the RAR of any scheme portfolio.
"It is often used as a measure of a portfolio manager's level of skill and ability to generate excess returns, relative to a benchmark and also attempts to identify the consistency of the performance by incorporating standard deviation/risk factor into the calculation," Sebi said.
In a circular, Sebi has asked mutual funds to disclose the information ratio of a scheme portfolio on their website, along with performance disclosure, on a daily basis.
Industry body Amfi will have to ensure that such disclosure will be available on its website in a comparable, downloadable (spreadsheet) and machine-readable format.
To bring uniformity across different MFs, Sebi also came out with a methodology for the calculation of IR for different categories of mutual fund schemes.
The provisions will come into force with effect within three months from the issuance of this circular.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES

Cheque Bounce Cases: Court imposes fine of Rs 3,03,000 and Rs 1,02,000 on two individuals; check out full details

SBI Latest FD Rates: Know your maturity amount on Rs 2 lakh investment in 1 year, 3 years and 5 years fixed deposits

SIP vs PPF: Rs 1,20,000/year investment for 30 years; which scheme can generate a higher retirement corpus

Gratuity Calculator: What will be your gratuity on Rs 45,000 last-drawn basic salary and 6.5 years of service?
08:19 PM IST