Variance drain a fact of life

Variance Drain: The difference between mean return and compound return over a period of time (usually a number of years) due to the variance (or variability) of periodic returns. The greater the variance of periodic returns, the more the compound return will fall below the mean return. In general, the compound return will fall below the mean return by about one-half the variance.  - from IFCI Risk Institute

Variance drain is a fact of life that cannot be avoided. It is one of the reasons why higher volatility managers will have lower information ratios. The drain in performance dampens returns and cuts the numerator of the information ratio.