Generally speaking, the higher the expected return of a portfolio, the greater the corresponding risk. Blindly pursuing high returns may lead investors to face practical risks beyond their ability to bear. Therefore, investors had better not take the rate of return as the only measure when choosing a fund, but should comprehensively consider its benefits and risks when evaluating the performance of the fund. The following is a brief introduction to a common fund performance evaluation index Sharp ratio. Sharp ratio is used to measure the return rate of portfolio relative to risk-free interest rate. It refers to the ratio of the part of fund income higher than the risk-free interest rate divided by the standard deviation of fund income in a certain period, which reflects the excess income brought by each unit risk. The specific calculation formula is: which represents the average rate of return of fund A; Represents the average risk-free interest rate, generally taking the yield of government bonds or the lump-sum interest rate of banks. Represents the standard deviation of fund A's return rate in a certain period, and measures the fluctuation of fund return. Generally speaking, the greater the standard deviation, the more unstable the fund performance. As can be seen from the formula, the Sharp ratio measures the income of the fund relative to the risk-free interest rate, and reflects the extra reward that the fund gets for each unit risk. The larger the value, the greater the income that the fund can get with relatively small risk, that is, the higher the income after risk adjustment. For example, the average returns of two funds A and B in a certain year are 10% and 8% respectively, and the standard deviations of returns are 14% and 10% respectively. When the risk-free interest rate was 2%, the Sharp ratios of A and B funds were: = (65,438+00%-respectively. Due to 0.57