Glossary
Sharpe ratio
Risk-adjusted return in a single number: how much return an investor got per unit of risk taken.
What it is
Return measured against risk
The Sharpe ratio measures return in excess of the risk-free rate, divided by standard deviation. It answers a simple question: how much return did the investor get per unit of risk taken? A high Sharpe ratio means good return relative to the swings involved. A low or negative ratio means the opposite, regardless of how the return looked in absolute terms.
- Risk-free rate
- The baseline an investor could otherwise earn without taking risk, for Amos Value the 3-month Swedish treasury bill.
- Standard deviation
- How much the portfolio's returns have swung around their average. The denominator in the ratio, a measure of the risk actually taken.
- Comparability
- Two portfolios with the same return can have different Sharpe ratios. The one with smaller swings for the same return has the better ratio.
In practice
How the ratio is read
A high return that required large swings to achieve is not necessarily a better outcome than a somewhat lower return with a smoother ride. The Sharpe ratio captures that trade-off in a single number. A short measurement period produces a ratio that can swing sharply from month to month, which makes comparisons over a longer stretch of time more reliable than any single month's figure.
Amos Value's Sharpe ratio in August 2026
3.38*†
* Based on the fund's history since inception (July 6, 2026), not the usual 12-month window. Can fluctuate more than a figure based on longer history.
† The 3-month Swedish treasury bill (Riksbank's reference rate) is used as the risk-free rate in the Sharpe ratio.
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Common questions about the Sharpe ratio
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