One line of math. Twenty pp of perspective on a return number.

Sharpe takes the return your portfolio earned above what a treasury bill would have paid, and divides by how much your statement bounced around to get there. Same gross return divided by twice the volatility is half the Sharpe.

The formula . Sharpe 1966

Sharpe = ( Return - Risk free rate ) / Std deviation of returns

Pick the same window for both numerator and denominator. Annualise both the return and the volatility. Use the local risk free rate. For India, 10Y G Sec or 91 day T bill yield is the convention . approximately 7 pct through this cycle.

Reference number

CAGR

Vol

Sharpe

NIFTY 50 TRI 2002 to 2026 . long run

14.1pct

17.8pct

0.40

S and P 500 TR USD Forty year window . USD

11.6pct

15.4pct

0.50

Active largecap MF . median India . regular plan . net of fees

12.6pct

18.4pct

0.30

Quality factor cohort From yesterday morning post

14.6pct

12.3pct

0.92

A systematic multi asset cohort Equity plus debt plus gold . rebalance harvest

15.4pct

10.2pct

1.20

Above 1.5 over a decade Rare . audit the methodology

1.5+

A Sharpe of 0.40 is the index. A Sharpe of 1.00 is a clean job. Anything north of 1.50 over a real ten year window earns the right to be questioned before it earns the right to be trusted.

Cohorts and reference numbers illustrative, computed on monthly returns over the stated windows. Sharpe 1966 Journal of Business. RFR proxy 7 pct India / 4 pct US long run average. Past performance . backtest only . not a guarantee.