17 Jan 2025SEBI Master Circular for Mutual Funds
AMCs must now disclose daily Information Ratio for equity schemes
Every equity scheme's Information Ratio — excess return over its benchmark divided by the standard deviation of that excess return — must now be published daily on the AMC's website alongside existing performance disclosures, and made available via AMFI in a downloadable, machine-readable format.
From the circular
View source document →“Mutual Funds/ AMCs shall disclose IR of equity schemes' portfolios on their website along with performance disclosures, on a daily basis. ... IR shall be calculated as under: (Portfolio Rate of Returns less Benchmark Rate of Returns) / Standard Deviation of Excess Return.”
In practice
A distributor comparing two equity schemes for a client can now pull each scheme's daily-published Information Ratio off the AMC's website. A fund with a higher IR relative to its Tier-1 benchmark has historically delivered more consistent excess return per unit of tracking risk — a sharper comparison point than headline returns alone.
Illustrative scenario written by Northspread — not text from the circular itself.