Sharpe Ratio: These two funds have 10 companies respectively; however, the computation indicates that the Sharpe ratio of ethical funds and corrupt funds is 1.7 and 1.5 correspondingly. Whereas the ethical funds are represented by a higher unit, the corrupt funds are slightly lower for every unit of risk. This therefore means that an potential shareholder will definitely consider this ratio to consider whether or not to invest in ethical funds.
The Treynor ratio: The Treynor proportion of unscrupulous funds is approximately two times higher than ethical funds. Unscrupulous funds are therefore represented by a ratio of 0.04685 while ethical funds are designated by a ratio of 0.109692. Implicitly, unscrupulous funds tend to have a top-rated yield over the risk-free rate of earnings than the ethical funds for each unit of market uncertainties. In the event that an investor uses this benchmark to choose funds, one is likely to opt for unscrupulous funds.
The Jensen ratio: These two funds have a positive alpha which implies that better securities picking skills of a fund manager. In this case, ethical funds have an alpha represented by 0.04 in comparison to an alpha of 0.08 that represents unscrupulous funds. Just because the unscrupulous funds are represented by a bigger ratio, literary denotes better fund performance.
Ultimately, based on the Jensen index, both ethical and unethical funds have a positive alpha, which are as a result of good securities picking skills of a fund manager.