The formula for calculating the Sharp ratio is = [e (RP)-RF]/σ p, where e (RP) is the expected rate of return of the portfolio; Rf: risk-free interest rate; σp: standard deviation of portfolio
The Sharp ratio of the fund reflects the extent to which the net growth rate of the unit venture fund exceeds the risk-free expected rate of return. If the Sharp ratio is positive, it means that the average net growth rate of the fund during the measurement period exceeds the risk-free interest rate. In the case that the interest rate of bank deposits in the same period is risk-free interest rate, it means that investment funds are superior to bank deposits. The greater the Sharp ratio, the higher the risk return of fund unit risk.