A Study on Risk and Return Analysis of Mutual Funds Schemes

Abstract

Mutual funds have become one of the most preferred investment avenues in India due to their professional management, diversification benefits, liquidity, and long-term wealth creation potential. As investors increasingly seek investment options that provide higher returns with manageable risk, evaluating the performance of mutual fund schemes has become essential. This study analyses the risk and return performance of five selected equity mutual fund schemes—Bandhan Small Cap Fund, ICICI Prudential Large Cap Fund, HDFC Flexi Cap Fund, Motilal Oswal Midcap Fund, and Nippon India Multi Cap Fund—during the period from 2021–22 to 2025–26. The study is based entirely on secondary data collected from the official websites of Asset Management Companies (AMCs), AMFI, SEBI, Value Research, and Moneycontrol. The performance of the selected schemes is evaluated using Mean Return, Standard Deviation, and Sharpe Ratio. The findings reveal that the Motilal Oswal Midcap Fund delivered the best overall risk-adjusted performance during the study period, while the Bandhan Small Cap Fund generated the highest annual return in 2023–24 but exhibited greater volatility. Most of the remaining schemes recorded negative Sharpe Ratios during several years, indicating comparatively weaker risk-adjusted performance. The study concludes that investors should evaluate both return and risk before investing and should adopt a long-term investment strategy for sustainable wealth creation.