{"id":640,"date":"2026-05-06T10:31:04","date_gmt":"2026-05-06T05:01:04","guid":{"rendered":"https:\/\/prodigypro.co.in\/blog\/?p=640"},"modified":"2026-05-06T10:32:43","modified_gmt":"2026-05-06T05:02:43","slug":"what-is-sortino-ratio-in-mutual-funds","status":"publish","type":"post","link":"https:\/\/prodigypro.co.in\/blog\/what-is-sortino-ratio-in-mutual-funds\/","title":{"rendered":"What is Sortino Ratio in Mutual Funds? A Complete Guide"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/05\/Sortino-Ratio-in-Mutual-Funds-1024x576.webp\" alt=\"Sortino Ratio in Mutual Funds\" class=\"wp-image-641\" srcset=\"https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/05\/Sortino-Ratio-in-Mutual-Funds-1024x576.webp 1024w, https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/05\/Sortino-Ratio-in-Mutual-Funds-300x169.webp 300w, https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/05\/Sortino-Ratio-in-Mutual-Funds-768x432.webp 768w, https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/05\/Sortino-Ratio-in-Mutual-Funds-1536x864.webp 1536w, https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/05\/Sortino-Ratio-in-Mutual-Funds-2048x1152.webp 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/prodigypro.co.in\/blog\/what-is-sortino-ratio-in-mutual-funds\/#Sortino_Ratio\" >Sortino Ratio<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/prodigypro.co.in\/blog\/what-is-sortino-ratio-in-mutual-funds\/#Why_does_it_matter_for_Mutual_Funds\" >Why does it matter for Mutual Funds?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/prodigypro.co.in\/blog\/what-is-sortino-ratio-in-mutual-funds\/#Negative_Volatility\" >Negative Volatility<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/prodigypro.co.in\/blog\/what-is-sortino-ratio-in-mutual-funds\/#Performance_Measurement_using_the_Sortino_Ratio\" >Performance Measurement using the Sortino Ratio<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/prodigypro.co.in\/blog\/what-is-sortino-ratio-in-mutual-funds\/#Why_Its_Useful_for_Investors\" >Why It&#8217;s Useful for Investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/prodigypro.co.in\/blog\/what-is-sortino-ratio-in-mutual-funds\/#Portfolio_Evaluation_within_Sortino_Ratio\" >Portfolio Evaluation within Sortino Ratio<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/prodigypro.co.in\/blog\/what-is-sortino-ratio-in-mutual-funds\/#What_is_the_Sortino_Ratio_in_simple_terms\" >What is the Sortino Ratio in simple terms?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/prodigypro.co.in\/blog\/what-is-sortino-ratio-in-mutual-funds\/#How_is_the_Sortino_Ratio_different_from_the_Sharpe_Ratio\" >How is the Sortino Ratio different from the Sharpe Ratio?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/prodigypro.co.in\/blog\/what-is-sortino-ratio-in-mutual-funds\/#What_is_downside_deviation\" >What is downside deviation?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/prodigypro.co.in\/blog\/what-is-sortino-ratio-in-mutual-funds\/#Why_is_the_Sortino_Ratio_important_for_investors\" >Why is the Sortino Ratio important for investors?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/prodigypro.co.in\/blog\/what-is-sortino-ratio-in-mutual-funds\/#What_is_a_good_Sortino_Ratio\" >What is a good Sortino Ratio?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Sortino_Ratio\"><\/span>Sortino Ratio<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The <strong>Sortino ratio<\/strong> is a financial metric used to evaluate the performance of an investment, such as a mutual fund, by adjusting for risk. Unlike the Sharpe ratio, which considers total volatility (both upside and downside), the Sortino ratio focuses only on downside risk, which is more relevant to investors concerned with risk and losses.<\/p>\n\n\n\n<p>The Sortino Ratio is a Financial tool used to assess the risk-adjusted return of an investment, such as a mutual fund. It improves upon the widely and commonly used Sharpe Ratio by focusing only on the downside deviation\u2014the portion of volatility that represents risk to investors.<\/p>\n\n\n\n<p><strong>Formula:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Rp =\u00a0 Average return of the portfolio ( mutual fund)<\/li>\n\n\n\n<li>Rf = Risk-free rate of return<\/li>\n\n\n\n<li>SD= <strong>standard deviation<\/strong> of downside returns ( only negative deviations from the mean)<\/li>\n<\/ul>\n\n\n\n<p><strong>Sortino Ratio =\u00a0 Rp-Rf\/SD<\/strong><\/p>\n\n\n\n<p>By isolating the risk that truly matters-<strong> return below a certain threshold<\/strong>&#8211; the Sortino Ratio gives a clearer picture of how well a mutual fund rewards investors for the risk of loss.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_does_it_matter_for_Mutual_Funds\"><\/span>Why does it matter for Mutual Funds?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In <strong>Mutual Funds analysis<\/strong>, the Sortino Ratio helps investors understand how well the fund is performing relative to the risk of negative returns. A higher Sortino Ratio indicates that the fund is generating strong returns with relatively low downside risk- making it more attractive to risk-conscious investors. Most investors are concerned primarily with losses rather than total fluctuations.<\/p>\n\n\n\n<p><strong>Key Benefits:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Focus on the downside risk: <\/strong>More aligned with investor concerns than total volatility.<\/li>\n\n\n\n<li><strong>Better performance measure: <\/strong>Highlights funds that manage risk more efficiently.<\/li>\n\n\n\n<li><strong>Improved comparison:<\/strong> useful when comparing funds with similar returns but different risk profiles.<\/li>\n<\/ul>\n\n\n\n<p><strong>Example:&nbsp;<\/strong><\/p>\n\n\n\n<p>Suppose a mutual fund delivers an average return of 10%, the risk-free rate is 2%, and its downside deviation is 5%. The Sortino Ratio would be:<\/p>\n\n\n\n<p>     \u00a010% &#8211; 2% \/ 5% = 1.6<\/p>\n\n\n\n<p>This value suggests a relatively good return per unit of downside risk.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Negative_Volatility\"><\/span>Negative Volatility<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Negative volatility<\/strong>, often referred to as downside deviation, is the measure of how much an investment&#8217;s returns fall below a certain threshold, typically the risk-free rate of a minimum acceptable return. Unlike standard volatility, which considers both upward and downward fluctuations, negative volatility <strong>focuses only on losses<\/strong>.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Investors are more interested in the losses that they suffer than the gains that they profit.<\/li>\n\n\n\n<li>Standard deviations penalize all volatility, even when returns are higher than expected.<\/li>\n\n\n\n<li>Negative volatility allows a more realistic risk analysis, especially for conservative investors.<\/li>\n<\/ul>\n\n\n\n<p>Now you might be thinking how it is used in the Sortino ratio, well the Sortino Ratio uses downside deviation ( negative volatility) instead of standard deviation to calculate how much return an investment gives <strong>per unit of \u201c bad\u201d risk.<\/strong><\/p>\n\n\n\n<p>If a mutual fund has high total vitality but most of it is due to positive returns, its <strong>Sharpe Ratio<\/strong> might look poor. But if its downside volatility is low, the Sortino Ratio will show that the fund is still a good performer in terms of avoiding losses.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Performance_Measurement_using_the_Sortino_Ratio\"><\/span>Performance Measurement using the Sortino Ratio<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The sortino ratio is a tool used to evaluate the risk-adjusted performance of an investment, such as a mutual fund. Unlike the Sharpe ratio which treats all volatility as risk &#8211; the Sortino Ratio focuses only on downside volatility, which reflects the reruns that fall below a minimum acceptable level.<\/p>\n\n\n\n<p>This makes it more accurate <span style=\"box-sizing: border-box; margin: 0px; padding: 0px;\">for<strong>\u00a0performance<\/strong><\/span><strong> measurement,<\/strong> especially for investors who care more about losses than total fluctuations.\u00a0\u00a0<\/p>\n\n\n\n<p><strong>How it measures Performance<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Isolates Downside risk<\/li>\n\n\n\n<li>Focuses on capital protection<\/li>\n\n\n\n<li>Helps compare funds<\/li>\n<\/ol>\n\n\n\n<p><strong>For example:<\/strong><\/p>\n\n\n\n<p>Assume two mutual funds both return 10% annually but,&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Fund A has a downside deviation of 6%<\/li>\n\n\n\n<li>Fund B has a downside deviation of 3%<\/li>\n\n\n\n<li>The risk-free rate is 2%<\/li>\n<\/ul>\n\n\n\n<p><strong>Then:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Fund A<\/strong> Sortino = (10-2) \/ 6 = <strong>1.33<\/strong><\/li>\n\n\n\n<li><strong>Fund B<\/strong> Sortino = (10-2) \/ 3 = <strong>2.67<\/strong><\/li>\n<\/ul>\n\n\n\n<p>So, Fund B offers better performance when accounting for downside risk. So, from a performance measurement perspective, <strong>Fund B is the more efficient investment.<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_Its_Useful_for_Investors\"><\/span>Why It&#8217;s Useful for Investors<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It gives a more realistic view of risk, better alignment with conservative investment goals, and is useful for selecting mutual funds with stable performance and limited downside. When it comes to evaluating investment performance, investors have plenty of tools at their disposal. One of the most insightful- but often overlooked- metrics is the sortino ratio. Unlike traditional measures that treat all volatility as bad, the sortino ratio makes an important distinction: it only penalizes downside risk. That makes it a sharper, more investor-friendly way to gauge returns.<\/p>\n\n\n\n<p>At its core, the Sortino Ratio is the variation of the Sharpe ratio. Both measure risk-adjusted returns, but the Sharpe ratio considers total volatility upward and downward. The sortino ratio, on the other hand, focuses solely on the negative deviations from a target or required rate of return. it asks: how much return is the investment generating for every unit of downside risk?<\/p>\n\n\n\n<p><strong>Sortino Ratio = ( portfolio Return &#8211; Risk -Free Rate ) \/ downside deviation<\/strong><\/p>\n\n\n\n<p><strong>Also, Check &#8211; <a href=\"https:\/\/prodigypro.co.in\/blog\/what-is-cams-kra\/\">What is CAMS KRA? How to Check KYC Status?<\/a><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Portfolio_Evaluation_within_Sortino_Ratio\"><\/span>Portfolio Evaluation within Sortino Ratio<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>When it comes to evaluating investment portfolios, many investors rely heavily on return-based metrics or broad risk indicators like the Sharpe ratio. But what if there was a more nuanced way to measure performance- one that separates good volatility from bad? That&#8217;s where we use the Sortino ratio .<\/p>\n\n\n\n<p>For investors focused on preserving capital and minimizing losses, the Sortino ratio offers a sharp lens for portfolio evaluation. While it shouldn&#8217;t be the only metric used, it&#8217;s a powerful complement to more general measures like the Sharpe Ratio.<\/p>\n\n\n\n<p>Next time you&#8217;re comparing investments, take a look at their sortino ratios. It might just help you uncover a hidden gem with smoother sailing.<\/p>\n\n\n\n<p>Please share your thoughts on this post by leaving a reply in the comments section. Contact us via phone,<a href=\"http:\/\/wa.me\/917347700888\" target=\"_blank\" rel=\"noreferrer noopener\">\u00a0WhatsApp<\/a>, or email to learn more about mutual funds, or visit our website,<a class=\"\" href=\"https:\/\/prodigypro.co.in\/\">\u00a0Prodigy Pro<\/a>. Alternatively, you can download the<a href=\"https:\/\/play.google.com\/store\/apps\/details?id=com.bfc_mf.prodigy_app&amp;pcampaignid=web_share\" target=\"_blank\" rel=\"noreferrer noopener\">\u00a0Prodigy Pro<\/a>\u00a0app to start investing today!<\/p>\n\n\n<div ><style>#sp-ea-639 .spcollapsing { height: 0; overflow: hidden; transition-property: height;transition-duration: 300ms;}#sp-ea-639.sp-easy-accordion>.sp-ea-single {margin-bottom: 10px; border: 1px solid #e2e2e2; }#sp-ea-639.sp-easy-accordion>.sp-ea-single>.ea-header a {color: #ffffff;}#sp-ea-639.sp-easy-accordion>.sp-ea-single>.sp-collapse>.ea-body {background: #fff; color: #444;}#sp-ea-639.sp-easy-accordion>.sp-ea-single {background: #7c8cff;}#sp-ea-639.sp-easy-accordion>.sp-ea-single>.ea-header a .ea-expand-icon { float: left; color: #444;font-size: 16px;}<\/style><div id=\"sp_easy_accordion-1778042017\"><div id=\"sp-ea-639\" class=\"sp-ea-one sp-easy-accordion\" data-ea-active=\"ea-click\" data-ea-mode=\"vertical\" data-preloader=\"\" data-scroll-active-item=\"\" data-offset-to-scroll=\"0\"><div class=\"ea-card ea-expand sp-ea-single\"><h3 class=\"ea-header\"><span class=\"ez-toc-section\" id=\"What_is_the_Sortino_Ratio_in_simple_terms\"><\/span><a class=\"collapsed\" id=\"ea-header-6390\" role=\"button\" data-sptoggle=\"spcollapse\" data-sptarget=\"#collapse6390\" aria-controls=\"collapse6390\" href=\"#\" aria-expanded=\"true\" tabindex=\"0\"><i aria-hidden=\"true\" role=\"presentation\" class=\"ea-expand-icon eap-icon-ea-expand-minus\"><\/i> What is the Sortino Ratio in simple terms?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3><div class=\"sp-collapse spcollapse collapsed show\" id=\"collapse6390\" data-parent=\"#sp-ea-639\" role=\"region\" aria-labelledby=\"ea-header-6390\"> <div class=\"ea-body\"><p><span style=\"font-weight: 400\">The Sortino Ratio is a financial metric that measures how much return an investment makes relative to the amount of downside risk it takes. Unlike the Sharpe Ratio, it only considers the negative volatility (losses), not the overall ups and downs.<\/span><\/p><\/div><\/div><\/div><div class=\"ea-card sp-ea-single\"><h3 class=\"ea-header\"><span class=\"ez-toc-section\" id=\"How_is_the_Sortino_Ratio_different_from_the_Sharpe_Ratio\"><\/span><a class=\"collapsed\" id=\"ea-header-6391\" role=\"button\" data-sptoggle=\"spcollapse\" data-sptarget=\"#collapse6391\" aria-controls=\"collapse6391\" href=\"#\" aria-expanded=\"false\" tabindex=\"0\"><i aria-hidden=\"true\" role=\"presentation\" class=\"ea-expand-icon eap-icon-ea-expand-plus\"><\/i> How is the Sortino Ratio different from the Sharpe Ratio?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3><div class=\"sp-collapse spcollapse \" id=\"collapse6391\" data-parent=\"#sp-ea-639\" role=\"region\" aria-labelledby=\"ea-header-6391\"> <div class=\"ea-body\"><p><span style=\"font-weight: 400\">While both ratios assess risk-adjusted return:<\/span><\/p><p><span style=\"font-weight: 400\">Sharpe Ratio uses standard deviation (total volatility).<\/span><\/p><p><span style=\"font-weight: 400\">Sortino Ratio uses downside deviation (only harmful volatility). This makes Sortino more useful when you want to focus specifically on the risk of losing money.<\/span><\/p><\/div><\/div><\/div><div class=\"ea-card sp-ea-single\"><h3 class=\"ea-header\"><span class=\"ez-toc-section\" id=\"What_is_downside_deviation\"><\/span><a class=\"collapsed\" id=\"ea-header-6392\" role=\"button\" data-sptoggle=\"spcollapse\" data-sptarget=\"#collapse6392\" aria-controls=\"collapse6392\" href=\"#\" aria-expanded=\"false\" tabindex=\"0\"><i aria-hidden=\"true\" role=\"presentation\" class=\"ea-expand-icon eap-icon-ea-expand-plus\"><\/i> What is downside deviation?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3><div class=\"sp-collapse spcollapse \" id=\"collapse6392\" data-parent=\"#sp-ea-639\" role=\"region\" aria-labelledby=\"ea-header-6392\"> <div class=\"ea-body\"><p><span style=\"font-weight: 400\">Downside deviation measures how much returns fall below a minimum acceptable return (like 0% or the risk-free rate). It\u2019s similar to standard deviation but only looks at bad performance.\u00a0<\/span><\/p><\/div><\/div><\/div><div class=\"ea-card sp-ea-single\"><h3 class=\"ea-header\"><span class=\"ez-toc-section\" id=\"Why_is_the_Sortino_Ratio_important_for_investors\"><\/span><a class=\"collapsed\" id=\"ea-header-6393\" role=\"button\" data-sptoggle=\"spcollapse\" data-sptarget=\"#collapse6393\" aria-controls=\"collapse6393\" href=\"#\" aria-expanded=\"false\" tabindex=\"0\"><i aria-hidden=\"true\" role=\"presentation\" class=\"ea-expand-icon eap-icon-ea-expand-plus\"><\/i> Why is the Sortino Ratio important for investors?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3><div class=\"sp-collapse spcollapse \" id=\"collapse6393\" data-parent=\"#sp-ea-639\" role=\"region\" aria-labelledby=\"ea-header-6393\"> <div class=\"ea-body\"><p><span style=\"font-weight: 400\">It helps investors:<\/span><\/p><p><span style=\"font-weight: 400\">Focus on actual risks of loss<\/span><\/p><p><span style=\"font-weight: 400\">Avoid penalizing investments for positive volatility<\/span><\/p><p><span style=\"font-weight: 400\">Make better comparisons between portfolios or funds with different risk profiles<\/span><\/p><\/div><\/div><\/div><div class=\"ea-card sp-ea-single\"><h3 class=\"ea-header\"><span class=\"ez-toc-section\" id=\"What_is_a_good_Sortino_Ratio\"><\/span><a class=\"collapsed\" id=\"ea-header-6394\" role=\"button\" data-sptoggle=\"spcollapse\" data-sptarget=\"#collapse6394\" aria-controls=\"collapse6394\" href=\"#\" aria-expanded=\"false\" tabindex=\"0\"><i aria-hidden=\"true\" role=\"presentation\" class=\"ea-expand-icon eap-icon-ea-expand-plus\"><\/i> What is a good Sortino Ratio?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3><div class=\"sp-collapse spcollapse \" id=\"collapse6394\" data-parent=\"#sp-ea-639\" role=\"region\" aria-labelledby=\"ea-header-6394\"> <div class=\"ea-body\"><p><span style=\"font-weight: 400\">There\u2019s no universal benchmark, but generally:<\/span><\/p><p><span style=\"font-weight: 400\">Above 2.0 = Excellent<\/span><\/p><p><span style=\"font-weight: 400\">1.0 to 2.0 = Good<\/span><\/p><p><span style=\"font-weight: 400\">Below 1.0 = Risk may not justify the return<\/span><\/p><p><span style=\"font-weight: 400\">Context matters\u2014compare within the same asset class or market conditions.<\/span><\/p><\/div><\/div><\/div><\/div><\/div><\/div>\n\n\n<p><strong>Disclaimer: <\/strong>This article is for educational purposes only and does not intend to substitute expert guidance. Mutual fund investments are subject to market risks. Please read the scheme-related document carefully before investing.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Sortino Ratio The Sortino ratio is a financial metric used to evaluate the performance of an investment, such as a mutual fund, by adjusting for risk. Unlike..<\/p>\n","protected":false},"author":1,"featured_media":641,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[977,980,976,283,975,916,979,973,978,971,974,972],"class_list":["post-640","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-downside-risk","tag-finance-basics","tag-investment-metrics","tag-investment-strategy","tag-mutual-fund-analysis","tag-mutual-fund-guide","tag-portfolio-performance","tag-risk-adjusted-return","tag-sharpe-vs-sortino","tag-sortino-ratio","tag-sortino-ratio-in-mutual-funds","tag-what-is-sortino-ratio"],"_links":{"self":[{"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/posts\/640","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/comments?post=640"}],"version-history":[{"count":1,"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/posts\/640\/revisions"}],"predecessor-version":[{"id":642,"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/posts\/640\/revisions\/642"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/media\/641"}],"wp:attachment":[{"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/media?parent=640"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/categories?post=640"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prodigypro.co.in\/blog\/wp-json\/wp\/v2\/tags?post=640"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}