Check the Sharpe ratio of your fund manager to have a smooth investing ride

Sharpe ratio is one measure that can tell you how much return a fund manager has given for each unit of risk taken

Have you checked the Sharpe ratio of your fund?    

Investors dislike risk and volatility. One fund manager may give high returns, but if his fund is very volatile investors may stay away from it. They would rather go with a fund manager who gives them a smoother ride. 

When you are selecting a fund for your portfolio, it is not enough just to look at who has been the best performer over the past three or five years. You also need to see which fund manager has given the best risk-adjusted return. Sharpe ratio is one measure that can tell you how much return a fund manager has given (excess return over benchmark) for each unit of risk (measured by standard deviation) taken.