Comparing Market Risk of Indian Balanced, Small and Mid cap and Large cap Funds

Article Type

Research Article

Publication Title

Finance India

Abstract

Balanced funds invest in a mixed portfolio of debt and equity, to hedge market risk. Small & mid cap funds invest purely in equity for long term capital appreciation. We compare the market risk and risk adjusted returns of 19 balanced, 40 small & mid cap and 40 large cap Indian funds for 10 financial years. Balanced funds are generally considered to be less risky than small & mid cap funds, which are perceived to be highly risky. But surprisingly, three small & mid cap funds and eleven large cap funds exhibited lower market risk than fifty percent of the balance funds, on daily or monthly basis, during period under study. Also, six small & mid cap funds exhibited lower market risk than fifty percent of the large cap funds on a day to day basis. Moreover, the success of a particular scheme of an asset management company does not ensure the success of the other schemes of the same company. We identify some funds where the market risk was well managed during the period under study.

First Page

603

Last Page

620

Publication Date

6-1-2022

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