Nobel Prize winner William Sharpe developed the Sharpe index as a way to determine risk-adjusted portfolio returns. It uses excess return and standard deviation to determine reward per unit of risk. The higher the Sharpe ratio, the better the fund’s risk-adjusted returns.
Since international funds have been shining lately, we decided to look at the funds that have had the best Sharpe ratios the past five years. While they may not be the best in absolute returns, they have given shareholders superior returns, considering the risks they take. Here, then, are the best foreign Sharpe shooters in the Morningstar database. Each fund has the highest Sharpe ratio in its Morningstar category.