A Study on Risk and Return Analysis of Selected Small Capital and Medium Capital Fund

Abstract

Mutual funds are very popular investments due to their ability to offer diversification, management, and ease of access. Different kinds of mutual funds exist, and among these, small Capital and Medium Capital funds attract attention due to their promise of greater earnings often accompanied by increased danger. This research examines the performance of chosen small- and medium-sized mutual funds by analyzing their risks and potential returns to ascertain whether these investments offer superior returns compared to other investors. The study employs several financial instruments like standard deviation, beta, Sharpe ratio, Treynor ratio, and Jensen's alpha to assess volatility, systemic risk, and risk-adjusted earnings. Small Capital funds provide significant returns but are highly unpredictable due to their dependence on market changes. Medium Capital funds offered a good balance of risk and reward, suggesting they provided more stability than smaller companies. The study aids investors in making better choices regarding mutual funds by considering all funds together rather than individually. It provides insights into how these funds perform and the risks involved, helping them decide what's best suited for their investment needs. This way, it supports informed decision-making based on factors like risk tolerance, financial goals, and timeframes.