A Study on Risk-Adjusted Performance Evaluation of Selected Active and Passive Equity Mutual Funds

Abstract

Mutual funds are one of the most preferred investment avenues due to their diversification benefits and professional fund management. This study evaluates the risk-adjusted performance of six selected active and passive equity mutual fund schemes in India using monthly Net Asset Value (NAV) data from June 2021 to May 2026. The performance of the selected schemes was assessed using Return, Standard Deviation, Beta, Sharpe Ratio, Treynor Ratio, Jensen's Alpha, and Tracking Error. The findings indicate variations in the risk-return performance of the selected mutual funds, with passive funds exhibiting lower Tracking Error and closer benchmark alignment. The study concludes that mutual fund selection should be based on investors' risk tolerance, return expectations, and investment objectives. The findings provide useful insights for investors, financial advisors, and asset management companies.