India’s securities regulator has ordered asset managers disclose the information ratio of equity mutual funds on a daily basis for greater transparency.
The ratio is a metric to measure risk-adjusted returns of a financial asset or portfolio.
The measure requiring daily disclosure of the ratio will become effective within three months, the Securities and Exchange Board of India (Sebi) says in a circular on January 17.
“The move is to bring more transparency in disclosures made by asset management companies and aid better decision making by investors,” according to the regulator.
Sebi has published a methodology for calculating the ratio for different categories of mutual fund schemes to ensure greater uniformity.