Risk-adjusted return

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Risk-adjusted return

Often we subtract from the rate of return on an asset a rate of return from another asset that has similar risk. This gives an abnormal rate of return that shows how the asset performed over and above a benchmark asset with the same risk. We can also use the beta of the asset multiplied by the benchmark return to create a hypothetical asset that has the same risk characteristics. The difference between the asset return and the beta times the benchmark is the risk adjusted return and is also known as the alpha.

Risk-Adjusted Return

The return on an asset or investment relative to the return on assets and investments with similar risk. The risk-adjusted return can help an investor determine whether he/she is extracting the highest possible return for the least possible risk. One way to calculate the risk-adjusted return is to take the Sharpe ratio.
References in periodicals archive ?
Faysal Income & Growth Fund (FIGF) is to provide superior long-term risk adjusted returns by investing in a diverse pool of fixed income securities, including money market instruments; in particular, the aim is to minimize interest rate risk through duration management and default risk through portfolio diversification.
Through diligent investment selection and an emphasis on quality over quantity, we remain focused on capital preservation and generating attractive risk adjusted returns, and on our primary goals of growing net asset value over time and delivering stable dividends to our shareholders."
The ETF tracks the Salt Low truBeta US Market Index, and gives exposure to US large and midcap equities with the opportunity for better risk adjusted returns.
VIS star rankings present only comparative performance within a peer group based on historical risk adjusted returns and do not provide assurance of future returns.
The ongoing expansion of our proprietary partnerships in Residential Credit, Commercial Real Estate and Middle Market Lending enable us to source unique and complementary investment opportunities at attractive risk adjusted returns.
The investments of this fund are continually monitored, reviewed as well as rebalanced to ensure the best risk adjusted returns.
NET de GERRERS is focused on cross sector investments in real assets, with specialist industry expertise, and active and best practice operational management to achieve superior risk adjusted returns for the investors, a press statement released after the event said.
Declining rates, broader terms and conditions, an unsustainable flow of net favorable loss reserve development, low investment yields and continued pressures from convergence capital are all negative factors that will adversely affect risk adjusted returns over the longer term.
We have found that both sets of principles combined, create optimal risk adjusted returns and provide the right investment characteristics for our clients." The participation from SEDCO Capital comes after Hassan Al-Jabri, SEDCO Capital's CEO, launched the firm's new Prudent Ethical Investing (PEI) investment strategy, integrating Shariah-compliant investment approach with ethical investing.
Thus individual equity and fixed income selection is likely to yield more control and better risk adjusted returns in a future of secular rising interest rates.
Each fund delivers entry to global equity markets and seeks to provide focused exposure to a specific factor that has historically delivered advanced risk adjusted returns: value, size, quality and momentum - enabling investors can express factor views throughout the business cycle.
EXPLORING OPPORTUNITIES TO MAKE BETTER RISK ADJUSTED RETURNS -- XPLORING OPPORTUNITIES TO MAKE BETTER RISK ADJUSTED RETURNS

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