Risk, Return and Resilience: A Comparative Study of Selected Indian Mutual Fund Categories

The mutual fund industry in India has experienced significant growth in recent years, driven by increasing investor awareness, financial market development, and the growing preference for diversified investment instruments. Mutual funds provide investors with opportunities to participate in capital markets while benefiting from professional portfolio management and diversification across multiple financial assets. Evaluating mutual fund performance therefore becomes essential for understanding how effectively different fund categories balance risk and return under varying market conditions. The present study examines the risk–return characteristics of selected mutual fund schemes across three major categories: equity funds, debt funds, and hybrid funds. The analysis is based on secondary data collected for thirty mutual fund schemes belonging to different asset management companies. Annual return data for the period 2021–2024 were collected along with key risk indicators including standard deviation, beta, Sharpe ratio, Jensen’s alpha, and Treynor ratio. These indicators are widely used in financial performance evaluation as they measure the relationship between portfolio returns and the risks undertaken by the fund manager (Sharpe, 1966; Jensen, 1968). Using these performance measures, the study compares the average return, volatility, and risk adjusted performance of each mutual fund category. The findings indicate that equity funds generally deliver higher average returns but are associated with greater volatility and market sensitivity. Debt funds demonstrate comparatively lower returns but exhibit greater stability and lower levels of risk. Hybrid funds, which combine equity and debt instruments, display a balanced risk–return profile and moderate volatility. Overall, the results suggest that the suitability of a mutual fund category largely depends on the investor’s risk tolerance and investment objectives. While equity funds may be appropriate for investors seeking long term capital appreciation, debt funds provide stability for conservative investors, and hybrid funds offer a diversified investment approach that balances growth and risk management. The study contributes to the understanding of mutual fund performance in the Indian financial market and provides insights that may assist investors and financial advisors in making informed portfolio decisions.