How Relevant Are Risk-Adjusted Returns?
What is Risk-Adjusted Returns in Mutual Funds? Risk-adjusted returns are essential to consider before considering online mutual fund investment . It is the rate of return that has been adjusted to account for the level of risk associated with the investment. Risk-adjusted returns are calculated using a statistical technique called risk-adjusted returns (or MAR). This method helps investors understand if they are getting better than average returns for the level of risk they have taken by comparing their returns with other investments, such as government bonds or cash. Calculating risk-adjusted returns aims to help investors compare investments that aren't necessarily identical but are similar enough so that they're expected to perform similarly over time. Risk-adjusted performance helps investors determine whether they would have been better off investing in another mutual fund instead of their current one — or if they should stay invested with their existin...
