what is the up market capture ratio 
the up market capture ratio is the statistical measure of an investment manager s overall performance in up markets it is used to evaluate how well an investment manager performed relative to an index during periods when that index has risen the up market capture ratio can be compared with the down market capture ratio in practice both measures are used in tandem calculating the up market capture ratiothe up market capture ratio is calculated by dividing the manager s returns by the returns of the index during the up market and multiplying that factor by 100 up down mcr mr ir 100 where mcr market capture ratio mr manager s returns ir index returns begin aligned frac text up text down text mcr frac text mr text ir times 100 textbf where text mcr text market capture ratio text mr text manager s returns text ir text index returns end aligned downup mcr irmr 100where mcr market capture ratiomr manager s returnsir index returns understanding the up market capture ratioan investment manager who has an up market ratio greater than 100 has outperformed the index during the up market for example an up market capture ratio of 120 indicates that the manager outperformed the market by 20 during the specified period many analysts use this simple calculation in their broader assessments of individual investment managers if an investment mandate calls for an investment manager to meet or exceed a benchmark index s rate of return the up market capture ratio is helpful for spotting those managers who are doing so this is important to investors who use an active investment strategy and consider relative returns rather than absolute returns as hedge funds often seek special considerationsthe up market capture ratio is just one of many indicators used by analysts to find good money managers because the ratio focuses on upside movements and doesn t account for downside losses moves some critics offer compelling evidence that it encourages managers to shoot for the moon but when combined with complementary performance indicators the up market capture ratio does present valuable investment insight 