# Information Ratio

*Risk & Portfolio — Finicade finance glossary*

A manager's excess return over a benchmark divided by their tracking error — reward per unit of active risk. The scoreboard for whether active management is actually earning its fees.

**Related terms:** [Tracking Error](https://finicade.com/glossary/tracking-error), [Sharpe Ratio](https://finicade.com/glossary/sharpe-ratio), [Alpha](https://finicade.com/glossary/alpha)

Source: https://finicade.com/glossary/information-ratio