Risk-Return Analysis of Top Indian Large-Cap Mutual Funds

Abstract

The mutual fund industry in India has evolved into a pivotal segment of the financial ecosystem, reflecting growing investor awareness and the increasing demand for diversified investment solutions. This study presents a comprehensive performance and risk analysis of large-cap equity mutual funds from five leading fund houses HDFC, Aditya Birla Sun Life, SBI, UTI, and Nippon India as of March 31, 2023. Using assets under management (AUM) as a key selection criterion, the study evaluates the investment strategies, returns across multiple time horizons (1-year, 3-year, 5-year, and 10-year), and associated risk levels of these funds in relation to their respective benchmarks. The analysis reveals that while all selected funds consistently outperformed their benchmarks over long-term horizons, they also carry a "Very High" risk classification, underscoring the trade-off between risk and return in equity-based investing. The findings highlight distinct portfolio management techniques and strategic allocation patterns employed by each fund house, offering valuable insights for retail and institutional investors. This research contributes to the broader understanding of mutual fund dynamics in India and serves as a decision-making tool for investors seeking long-term capital appreciation through large-cap mutual fund investments.