Risk-adjusted performance

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Risk-Adjusted Performance

The performance of a security or investment relative to its risk. One may calculate the risk-adjusted performance in a number of ways. One may consider the investment's volatility. Alternatively, one may compare its performance to the performance of the market as a whole or relative to securities or investments with similar levels of risk.

Risk-adjusted performance.

When you evaluate an investment's risk-adjusted performance, you aren't looking simply at its straight performance figures but at those figures in relation to the amount of risk you took (or would have taken) to get the return the investment produced.

One method is to investigate the investment's price volatility over various periods of time, including different market environments.

For example, you might consider how far the price fell in the most recent bear market against its price in a bull market, or how it performed in a recent market correction. In general, the greater the volatility, the greater the risk.

However, many analysts believe that looking exclusively at past performance can be deceptive in evaluating the risk you are taking in making a certain investment, since it can't predict what will happen in the future.

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6, 2014 /PRNewswire/ -- AdvisorShares, a leading sponsor of actively managed exchange-traded funds (ETFs), announced today that the AdvisorShares TrimTabs Float Shrink ETF(NYSE Arca: TTFS) has received a Five-Star Morningstar Rating(TM) for both its three-year and overall risk adjusted performances from inception through October 31, 2014 out of 347 funds in Morningstar's Mid-Cap Blend category.
AdvisorShares Madrona Domestic ETF(NYSE Arca: FWDD) C a domestic equity strategy that holds a Five-Star Morningstar Rating(TM) for its three-year and overall risk adjusted performances from inception through October 31, 2014 out of 1,385 funds in Morningstar's Large Blend category.
9, 2014 /PRNewswire/ -- AdvisorShares, a leading sponsor of actively managed exchange-traded funds (ETFs), announced today that the AdvisorShares Madrona Domestic ETF (NYSE Arca: FWDD) has received a Five-Star Morningstar Rating(TM) for both its three-year and overall risk adjusted performances from inception through August 31, 2014 out of 1,381 funds in Morningstar's Large Blend category.
Additionally, another active ETF managed by Madrona, the AdvisorShares Madrona Global Bond ETF (NYSE Arca: FWDB) holds a Four-Star Morningstar Rating(TM) for its three-year and overall risk adjusted performances from inception through August 31, 2014 out of 294 funds in Morningstar's World Bond category.
With FWDD and FWDB reaching their three-year milestones, half of the AdvisorShares actively managed ETFs eligible for Morningstar ratings have been recognized with four stars or higher based on the three-year and overall risk adjusted performances, which also include:

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