{"id":15958,"date":"2021-10-26T07:12:00","date_gmt":"2021-10-26T07:12:00","guid":{"rendered":"https:\/\/www.5paisa.com\/finschool\/?post_type=markets&#038;p=15958"},"modified":"2024-08-02T19:00:34","modified_gmt":"2024-08-02T13:30:34","slug":"measuring-risk-return-of-mutual-fund","status":"publish","type":"markets","link":"https:\/\/www.5paisa.com\/finschool\/course\/mutual-fund-course\/measuring-risk-return-of-mutual-fund\/","title":{"rendered":"Understand Measures of Risk &#038; Return in Mutual Fund"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"15958\" class=\"elementor elementor-15958\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-23ba90b elementor-section-full_width tab_container elementor-section-height-default elementor-section-height-default\" data-id=\"23ba90b\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container 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href=\"https:\/\/www.5paisa.com\/finschool\/course\/mutual-fund-course\/mutual-funds-classification\/\">Learn About Classification of Mutual Funds From Mutual Fund Course<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/mutual-fund-course\/things-to-know-before-buying-mutual-funds\/\">Things To Know Before Buying MFs<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/mutual-fund-course\/measuring-risk-return-of-mutual-fund\/\">Understand Measures of Risk &#038; Return in Mutual Fund<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/mutual-fund-course\/what-are-exchange-traded-funds\/\">What Are ETFs<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a 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background-color:rgb(255, 255, 255); min-height:400px; '><h2 style=\"text-align: left\"><strong>5.1 How To Measure The Risk Involved In Mutual Fund<\/strong><\/h2>\r\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter wp-image-48845 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/How-to-measure-risk-involved-in-Mutual-Fund.png\" alt=\"How-to-measure-risk-involved-in-Mutual-Fund\" width=\"1101\" height=\"690\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/How-to-measure-risk-involved-in-Mutual-Fund.png 1101w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/How-to-measure-risk-involved-in-Mutual-Fund-300x188.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/How-to-measure-risk-involved-in-Mutual-Fund-1024x642.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/How-to-measure-risk-involved-in-Mutual-Fund-768x481.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/How-to-measure-risk-involved-in-Mutual-Fund-50x31.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/How-to-measure-risk-involved-in-Mutual-Fund-100x63.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/How-to-measure-risk-involved-in-Mutual-Fund-150x94.png 150w\" sizes=\"(max-width: 1101px) 100vw, 1101px\" \/><\/p>\r\n<p>&nbsp;<\/p>\r\n<p><strong><b>Anand:<\/b><\/strong>\u00a0How do we measure risk in funds?<\/p>\r\n<p><strong><b>Ridhima:<\/b><\/strong>\u00a0We use ratios that show how volatile a fund is and how well it performs. These ratios help us compare funds based on more than their returns.<\/p>\r\n<p>Most investors, when evaluating a mutual fund, instinctively chase the highest possible return. But returns alone are only half the story , every investment carries risk, and true success lies in whether the return earned actually justifies the risk taken. A fund that delivers solid returns without exposing investors to disproportionate volatility is far more valuable than one that simply posts an impressive number on paper.<\/p>\r\n<p>A well-chosen mutual fund isn\u2019t just about raw performance , it\u2019s about efficiency: generating better returns than peers while taking on the same or lower risk. Judging that balance requires more than return figures alone; it calls for structured tools that quantify both risk and volatility. Fortunately, finance offers a set of statistical ratios built precisely for this purpose, letting investors look past marketing brochures and understand how a fund actually behaves across different market conditions, how consistent its performance really is, and whether the risk being taken is genuinely worth the reward.<\/p>\r\n<p>Let\u2019s explore the key measures that help decode risk in mutual funds.<\/p><\/div>\n<div id='text_slider_slide02' class='sa_hover_container' data-hash='Alpha' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:400px; '><h2 style=\"text-align: left\"><strong>5.2 Alpha<\/strong><\/h2>\r\n<p>&nbsp;<\/p>\r\n<h3 style=\"text-align: left\"><img decoding=\"async\" class=\"aligncenter wp-image-48846 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/ALPHA.png\" alt=\"Alpha\" width=\"1080\" height=\"1041\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/ALPHA.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/ALPHA-300x289.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/ALPHA-1024x987.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/ALPHA-768x740.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/ALPHA-50x48.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/ALPHA-100x96.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/ALPHA-150x145.png 150w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/h3>\r\n<p>Alpha is one of the most important measures for evaluating actively managed funds. It represents the excess return a fund delivers relative to its benchmark, after accounting for the risk taken. In essence, Alpha answers a simple question:<\/p>\r\n<p><strong><em><i>Did the fund manager add value beyond what the market itself provided?<\/i><\/em><\/strong><\/p>\r\n<p><strong><b>Definition<\/b><\/strong><\/p>\r\n<p>Alpha is expressed as a percentage.<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Alpha = 0<\/b><\/strong>\u2192 The fund performed exactly in line with its benchmark.<\/li>\r\n<li><b><\/b><strong><b>Positive Alpha<\/b><\/strong>\u2192 The fund outperformed the benchmark.<\/li>\r\n<li><b><\/b><strong><b>Negative Alpha<\/b><\/strong>\u2192 The fund underperformed relative to the benchmark.<\/li>\r\n<\/ul>\r\n<p><strong><b>Why Alpha Matters<\/b><\/strong><\/p>\r\n<ul>\r\n<li>For <strong><b>actively managed funds<\/b><\/strong>, Alpha is the ultimate test of skill \u2014 investors pay higher fees for active management precisely because they expect a manager to generate positive Alpha.<\/li>\r\n<li>For <strong><b>index funds<\/b><\/strong>, Alpha stays close to zero by design, since these funds aim to replicate the benchmark rather than beat it.<\/li>\r\n<\/ul>\r\n<p><strong><b>Illustrative Example<\/b><\/strong><\/p>\r\n<p>Suppose the NIFTY 50 index delivered 12% in a year.<\/p>\r\n<ul>\r\n<li>Fund A delivered 14% \u2192 Alpha = +2% (outperformance).<\/li>\r\n<li>Fund B delivered 10% \u2192 Alpha = \u22122% (underperformance).<\/li>\r\n<\/ul>\r\n<p>This shows how Alpha isolates the manager\u2019s genuine contribution beyond the market\u2019s natural movement.<\/p>\r\n<p><strong><b>Real Fund Comparisons<\/b><\/strong><\/p>\r\n<p>Let\u2019s consider two large-cap equity funds benchmarked against NIFTY 50:<\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong>Fund<\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong>Benchmark Return<\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong>Fund Return<\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong>Alpha<\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Axis Bluechip Fund<\/p>\r\n<\/td>\r\n<td>\r\n<p>12%<\/p>\r\n<\/td>\r\n<td>\r\n<p>16.21%<\/p>\r\n<\/td>\r\n<td>\r\n<p>+4.21%<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Canara Robeco Bluechip Equity Fund<\/p>\r\n<\/td>\r\n<td>\r\n<p>12%<\/p>\r\n<\/td>\r\n<td>\r\n<p>15.98%<\/p>\r\n<\/td>\r\n<td>\r\n<p>+3.98%<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p><strong><b>Interpretation:<\/b><\/strong><\/p>\r\n<p>Axis Bluechip generated 4.21% more than the benchmark, reflecting strong fund management decisions.<\/p>\r\n<p>Canara Robeco also outperformed, with 3.98% Alpha, indicating consistent value addition.<\/p>\r\n<p>Both funds show that active management can justify itself when Alpha is meaningfully positive.<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Sustainability of Alpha: <\/b><\/strong>A single year\u2019s Alpha could simply reflect luck or a temporary market anomaly. Consistently positive Alpha across multiple market cycles is a much stronger indicator of genuine manager skill.<\/li>\r\n<li><b><\/b><strong><b>Risk Context: <\/b><\/strong>Alpha should always be read alongside Beta and the Sharpe Ratio \u2014 a high Alpha paired with excessive volatility may not suit a conservative investor.<\/li>\r\n<li><b><\/b><strong><b>Investor Application: <\/b><\/strong>When comparing funds within the same category, Alpha helps identify which managers are truly adding value beyond a passive benchmark.<\/li>\r\n<\/ul><\/div>\n<div id='text_slider_slide03' class='sa_hover_container' data-hash='BETA' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:400px; '><h2 style=\"text-align: left\"><strong>5.3 BETA<\/strong><\/h2>\r\n<p><img decoding=\"async\" class=\"aligncenter wp-image-48847 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/BETA.png\" alt=\"BETA\" width=\"1080\" height=\"802\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/BETA.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/BETA-300x223.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/BETA-1024x760.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/BETA-768x570.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/BETA-50x37.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/BETA-100x74.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/BETA-150x111.png 150w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>&nbsp;<\/p>\r\n<p><strong>Anand:<\/strong> And what about Beta?<\/p>\r\n<p><strong>Ridhima:<\/strong> Beta measures how volatile a fund is compared to its benchmark.<\/p>\r\n<p><strong>Anand:<\/strong> If Beta is 1?<\/p>\r\n<p><strong>Ridhima:<\/strong> If the Beta is 1 then the fund moves like the benchmark. If it is than 1 then it means the fund has lower risk.. If it is more than 1 then it means the fund has higher volatility.<\/p>\r\n<p><strong><b>Understanding Beta and Its Role Alongside Alpha<\/b><\/strong><\/p>\r\n<p>Beta is one of the most widely used measures of relative risk in mutual fund evaluation. It shows how volatile a fund is compared to its benchmark index. Where Alpha focuses on excess returns, Beta focuses purely on sensitivity to market movements.<\/p>\r\n<p><strong><b>How Beta Works<\/b><\/strong><\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Beta = 1<\/b><\/strong>\u2192 The fund moves in lockstep with the benchmark \u2014 a 1% move in the benchmark implies roughly a 1% move in the fund.<\/li>\r\n<li><b><\/b><strong><b>Beta &lt; 1<\/b><\/strong>\u2192 The fund is less volatile than the benchmark, cushioning losses during downturns but also capturing smaller gains during rallies.<\/li>\r\n<li><b><\/b><strong><b>Beta &gt; 1<\/b><\/strong>\u2192 The fund is more volatile than the benchmark, magnifying both gains and losses.<\/li>\r\n<li><b><\/b><strong><b>Beta = \u22121<\/b><\/strong>\u2192 The fund moves inversely to the benchmark \u2014 if the benchmark rises 1%, the fund falls 1%.<\/li>\r\n<\/ul>\r\n<p>Beta, then, doesn\u2019t measure a fund\u2019s absolute risk, but rather its riskiness relative to the market index.<\/p>\r\n<p><strong><b>Practical Example<\/b><\/strong><\/p>\r\n<p>Suppose the benchmark index falls by 1%:<\/p>\r\n<ul>\r\n<li>Fund X (Beta = 0.77) \u2192 Expected fall = 0.77%<\/li>\r\n<li>Fund Y (Beta = 0.86) \u2192 Expected fall = 0.86%<\/li>\r\n<\/ul>\r\n<p>Both funds are less volatile than the benchmark, but Fund X is slightly more defensive since its Beta sits further below 1.<\/p>\r\n<p><strong><b>Combining Alpha and Beta<\/b><\/strong><\/p>\r\n<p>The real insight comes from analysing Alpha and Beta together:<\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong>Fund<\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong>Alpha<\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong>Beta<\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong>Interpretation<\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Axis Bluechip Fund<\/p>\r\n<\/td>\r\n<td>\r\n<p>+4.21<\/p>\r\n<\/td>\r\n<td>\r\n<p>0.77<\/p>\r\n<\/td>\r\n<td>\r\n<p>Outperformed benchmark significantly, with lower volatility<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Canara Robeco Bluechip Fund<\/p>\r\n<\/td>\r\n<td>\r\n<p>+3.98<\/p>\r\n<\/td>\r\n<td>\r\n<p>0.86<\/p>\r\n<\/td>\r\n<td>\r\n<p>Outperformed benchmark, but with slightly higher volatility<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p><strong><b>Analysis:<\/b><\/strong><\/p>\r\n<ul>\r\n<li>Axis Bluechip combines a higher Alpha (stronger excess returns) with a lower Beta (less volatility) \u2014 meaning investors are rewarded with superior returns while taking on relatively less risk.<\/li>\r\n<li>Canara Robeco also adds value, but with a Beta closer to 1, it\u2019s more sensitive to market swings.<\/li>\r\n<\/ul>\r\n<p>From a risk-adjusted perspective, Axis Bluechip is the more attractive option, since it pairs strong outperformance with reduced volatility.<\/p><\/div>\n<div id='text_slider_slide04' class='sa_hover_container' data-hash='Standard-Deviation' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>5.4 Standard Deviation<\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-48848 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Standard-Deviation.png\" alt=\"Standard Deviation\" width=\"1101\" height=\"864\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Standard-Deviation.png 1101w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Standard-Deviation-300x235.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Standard-Deviation-1024x804.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Standard-Deviation-768x603.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Standard-Deviation-50x39.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Standard-Deviation-100x78.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Standard-Deviation-150x118.png 150w\" sizes=\"(max-width: 1101px) 100vw, 1101px\" \/><\/p>\r\n<p>&nbsp;<\/p>\r\n<p><strong>Anand:<\/strong> What does Standard Deviation show?<\/p>\r\n<p><strong>Ridhima:<\/strong> Standard Deviation shows how much a funds returns vary. If the Standard Deviation is higher then it means the fund has ups and downs.<\/p>\r\n<p><strong>Anand:<\/strong> So a lower Standard Deviation is safer?<\/p>\r\n<p><strong>Ridhima:<\/strong> Exactly. A lower Standard Deviation means the fund has stable returns.<\/p>\r\n<ol>\r\n<li>Standard Deviation becomes especially relevant when you invest in a market-linked product like a mutual fund, since returns fluctuate daily based on a range of factors. A bank fixed deposit, by contrast, offers fixed and certain returns, so variability simply doesn\u2019t come into play.<\/li>\r\n<li>Standard Deviation captures the volatility of a fund\u2019s returns \u2014 a higher figure means greater variation, and vice versa. In technical terms, it measures the dispersion of returns from their average over a given period, generally calculated using trailing monthly total returns over 3, 5, or 10 years.<\/li>\r\n<li>For example, suppose a mutual fund delivers an average return of 10% over a period of time. As expected, it will have had some strong months and some weak ones, with returns swinging anywhere between +20% and \u221215%.<\/li>\r\n<li>This up-and-down trajectory in a fund\u2019s NAV is precisely what Standard Deviation captures and expresses as an annualised figure.<\/li>\r\n<\/ol>\r\n<h3><strong><b>For example, let\u2019s consider the above two funds:<\/b><\/strong><\/h3>\r\n<p>The Standard Deviation of the Axis fund is 17.43%, while that of the Canara Robeco fund is 18.64% \u2014 implying that the Canara fund carries somewhat more risk than the Axis fund.<\/p>\r\n<p>To put this in context, if you invest \u20b910,000 across both funds at the same time, by the end of the year the profit or loss could fall anywhere within this range:<\/p>\r\n<p>Loss = Investment \u00d7 (1 \u2212 SD)<\/p>\r\n<p>Gains = Investment \u00d7 (1 + SD)<\/p>\r\n<p>The larger the Standard Deviation, the wider the range of possible gains or losses.<\/p>\r\n<h3><strong><b>Measuring the Returns of the Mutual Fund<\/b><\/strong><\/h3>\r\n<p>The following methods are used to measure the returns of a mutual fund investment:<\/p>\r\n<h4>Absolute Returns<\/h4>\r\n<ul>\r\n<li>Here, gains are calculated simply as the difference between the initial purchase price and the final sale price. This method does not account for the time value of money.<\/li>\r\n<\/ul>\r\n<h4>Compounded Annual Growth Rate<\/h4>\r\n<ul>\r\n<li>CAGR represents the rate of interest that would be needed for an investment to grow from its starting balance to its ending balance, with interest computed on both the principal and the accumulated interest.<\/li>\r\n<li>The formula for CAGR is: CAGR = (Ending Balance \/ Beginning Balance)^(1\/number of years).<\/li>\r\n<li>For example, if \u20b910,000 is invested and grows to \u20b912,000 over 2 years, the CAGR is (12,000\/10,000)^(1\/2) = 9.54%.<\/li>\r\n<li>This method gives a more accurate picture of returns than absolute returns, since it accounts for the change in the value of money over time.<\/li>\r\n<\/ul><\/div>\n<div id='text_slider_slide05' class='sa_hover_container' data-hash='Method-To-Evaluate-The-Performance-Of-Mutual-Fund' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>5.5 <\/strong><strong>Method To Evaluate The Performance Of Mutual Fund<\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-48849 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Methods-to-Evaluate-Performace-of-Mutual-Fund.png\" alt=\"Methods-to-Evaluate-Performace-of-Mutual-Fund\" width=\"1080\" height=\"845\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Methods-to-Evaluate-Performace-of-Mutual-Fund.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Methods-to-Evaluate-Performace-of-Mutual-Fund-300x235.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Methods-to-Evaluate-Performace-of-Mutual-Fund-1024x801.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Methods-to-Evaluate-Performace-of-Mutual-Fund-768x601.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Methods-to-Evaluate-Performace-of-Mutual-Fund-50x39.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Methods-to-Evaluate-Performace-of-Mutual-Fund-100x78.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Methods-to-Evaluate-Performace-of-Mutual-Fund-150x117.png 150w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>&nbsp;<\/p>\r\n<p><strong>Anand:<\/strong> How do I check if a fund is performing well?<\/p>\r\n<p><strong>Ridhima:<\/strong> You should track if your portfolio value grows steadily. You should also compare it with similar funds monitor its consistency and see if it meets your goals.<\/p>\r\n<ul>\r\n<li>Selecting an investment is just the starting point \u2014 as time passes, you\u2019ll need to keep monitoring how these investments are performing together within your portfolio to see whether you\u2019re actually progressing toward your goals. Generally, progress simply means your portfolio\u2019s overall value is rising steadily, even if one or two individual holdings have lost value along the way.<\/li>\r\n<li>If your investments show no gains, or your account value keeps slipping, you\u2019ll need to figure out why and decide on your next step. Assessing performance properly means looking at your fund through several different lenses.<\/li>\r\n<\/ul>\r\n<p><strong><b>So let\u2019s look at some of the most popular methods of evaluation for mutual funds:<\/b><\/strong><\/p><\/div>\n<div id='text_slider_slide06' class='sa_hover_container' data-hash='Information-Ratio' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>5.6 Information Ratio<\/strong><\/h2>\r\n<p>&nbsp;<\/p>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-48850 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Information-Ratio.png\" alt=\"Information Ratio\" width=\"1102\" height=\"1085\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Information-Ratio.png 1102w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Information-Ratio-300x295.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Information-Ratio-1024x1008.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Information-Ratio-768x756.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Information-Ratio-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Information-Ratio-100x98.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Information-Ratio-96x96.png 96w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Information-Ratio-150x148.png 150w\" sizes=\"(max-width: 1102px) 100vw, 1102px\" \/><\/p>\r\n<p><strong>Anand:<\/strong> What\u2019s the Information Ratio?<\/p>\r\n<p><strong>Ridhima:<\/strong> The Information Ratio measures the return a fund gives compared to its benchmark, adjusted for risk.<\/p>\r\n<p><strong>Anand:<\/strong> Is an Information Ratio better?<\/p>\r\n<p><strong>Ridhima:<\/strong> Yes that is right. A higher Information Ratio shows that the fund manager is consistently beating the benchmark.<\/p>\r\n<ul>\r\n<li>The Information Ratio, often called IR, measures the risk-adjusted return of a portfolio by comparing its performance against a benchmark \u2014 usually a market index like the Nifty 50, though it could equally be an index representing a specific sector. In essence, it captures how well a portfolio is matching or exceeding its benchmark\u2019s returns.<\/li>\r\n<li>It\u2019s calculated by dividing the fund\u2019s active return (the difference between the fund\u2019s return and its benchmark\u2019s return) by its tracking error (the standard deviation of that active return). The IR measures the fund\u2019s performance relative to its benchmark while adjusting for the volatility of that gap \u2014 which is why it\u2019s also known as the appraisal ratio.<\/li>\r\n<\/ul>\r\n<p><strong><b>IR = (Rp \u2212 Rb) \/ Tracking error, where<\/b><\/strong><\/p>\r\n<p><strong><b>Rp = portfolio return<\/b><\/strong><\/p>\r\n<p><strong><b>Rb = return of benchmark<\/b><\/strong><\/p>\r\n<p><strong><b>Tracking error = standard deviation of the difference between portfolio and benchmark returns<\/b><\/strong><\/p>\r\n<h3><strong><b>Significance:<\/b><\/strong><\/h3>\r\n<ul>\r\n<li>Essentially, the Information Ratio tells an investor how much excess return was generated for the amount of excess risk taken relative to the benchmark. It tests a fund manager\u2019s consistency, revealing whether they beat the benchmark by a wide margin in just a few months or by smaller margins consistently, month after month.<\/li>\r\n<li>For a given level of risk, a higher active return leads to a higher Information Ratio, reflecting greater consistency in a manager\u2019s ability to deliver superior returns. The higher the ratio, the stronger the fund manager\u2019s performance \u2014 and the ratio is especially useful when comparing funds that share a similar management style.<\/li>\r\n<\/ul>\r\n<p><strong><b>Example of Information Ratio<\/b><\/strong><\/p>\r\n<p>Suppose you\u2019re deciding between two funds \u2014 Fund A and Fund B \u2014 and want to compare their Information Ratios using the Nifty 50 as the benchmark.<\/p>\r\n<p>Fund A delivered 12% returns against a benchmark return of 10%, with a standard deviation of 6% for both fund and benchmark returns. Fund B also delivered 12% returns, but against a benchmark return of 8%, with a standard deviation of 9%.<\/p>\r\n<h3><strong><b>Using the formula for Information Ratio:<\/b><\/strong><\/h3>\r\n<ul>\r\n<li><b><\/b><strong><b>Fund A:<\/b><\/strong>IR = (12% \u2212 10%) \/ 6% = 0.33<\/li>\r\n<li><b><\/b><strong><b>Fund B:<\/b><\/strong>IR = (12% \u2212 8%) \/ 9% = 0.44<\/li>\r\n<\/ul>\r\n<p>Fund B\u2019s Information Ratio is higher than Fund A\u2019s, implying that Fund B is more consistent in its returns and has greater potential to deliver superior performance going forward.<\/p>\r\n<h3><strong><b>Interpretation<\/b><\/strong><\/h3>\r\n<p>A negative Information Ratio suggests the fund manager was unable to generate any excess return at all. An Information Ratio below 0.4 suggests the fund hasn\u2019t produced meaningful excess returns over a sufficiently long period and may not be a strong investment choice. A ratio between 0.4 and 0.6 is generally considered good, while a ratio between 0.61 and 1 is regarded as an excellent investment.<\/p><\/div>\n<div id='text_slider_slide07' class='sa_hover_container' data-hash='Sharpe-Ratio' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>5.7 Sharpe Ratio<\/strong><\/h2>\r\n<p>&nbsp;<\/p>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-48851 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Sharpe-Ratio.png\" alt=\"Sharpe Ratio\" width=\"776\" height=\"864\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Sharpe-Ratio.png 776w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Sharpe-Ratio-269x300.png 269w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Sharpe-Ratio-768x855.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Sharpe-Ratio-45x50.png 45w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Sharpe-Ratio-90x100.png 90w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Sharpe-Ratio-150x167.png 150w\" sizes=\"(max-width: 776px) 100vw, 776px\" \/><\/p>\r\n<p><strong>Anand:<\/strong> And what about the Sharpe Ratio?<\/p>\r\n<p><strong>Ridhima<\/strong>: The Sharpe Ratio compares a funds returns with risk- returns, adjusted for volatility.<\/p>\r\n<p><strong>Anand<\/strong>: What\u2019s a good Sharpe score?<\/p>\r\n<p><strong>Ridhima<\/strong>: A Sharpe score above 2 is really good.. A score above 3 is exceptional.<\/p>\r\n<p>The Sharpe Ratio is similar to the Information Ratio, except it uses a risk-free security as its benchmark for comparison, rather than another actively managed fund.<\/p>\r\n<p><strong><b>Sharpe Ratio = (Rp \u2212 Rf) \/ Standard Deviation,<\/b><\/strong><\/p>\r\n<p><strong><b>where Rf = risk-free return<\/b><\/strong><\/p>\r\n<ul>\r\n<li>The Sharpe Ratio is a handy way to measure a fund\u2019s risk-adjusted return potential. Risk-adjusted return, in essence, is the return earned above and beyond what a risk-free asset \u2014 such as a fixed deposit or government bond \u2014 would provide. This \u201cextra\u201d return is viewed in light of the additional risk an investor takes on by choosing something riskier, like an equity fund.<\/li>\r\n<li>The risk inherent in an investment is captured through its standard deviation, so a higher Sharpe Ratio indicates a fund is generating better returns for every additional unit of risk taken. It effectively justifies the fund\u2019s underlying volatility, which is why the Sharpe Ratio is such a useful tool for comparing funds against one another.<\/li>\r\n<\/ul>\r\n<h3><strong><b>Analysis and Interpretation<\/b><\/strong><\/h3>\r\n<p>A higher Sharpe Ratio is always preferable to a lower one, since it shows the portfolio is making sound investment decisions rather than simply being swept along by the risk it carries. Here\u2019s a general guide to interpreting Sharpe Ratio values:<\/p>\r\n<p><strong><b>Sharpe Ratio Grading Thresholds<\/b><\/strong><\/p>\r\n<ul>\r\n<li>&lt; 1: Not Good<\/li>\r\n<li>1 \u2013 1.99: Ok<\/li>\r\n<li>2 \u2013 2.99: Really Good<\/li>\r\n<li>&gt; 3: Exceptional<\/li>\r\n<\/ul>\r\n<p>Take a portfolio invested purely in Treasury bills, for example \u2014 these are considered risk-free, so there\u2019s no volatility and no return above the risk-free rate, meaning the Sharpe Ratio would be zero.<\/p>\r\n<p>Other portfolios that take on more risk might carry a Sharpe Ratio of 1, 2, or 3. Anything at or above 3 is generally considered an excellent measurement and, all else equal, a strong investment.<\/p>\r\n<p>A ratio of 1, 2, or 3 essentially tells you how much additional return you\u2019re earning for holding a riskier investment over a risk-free one \u2014 a direct measure of the compensation you\u2019re receiving for taking on that extra risk.<\/p>\r\n<p><strong><b>Example \u2014 Growth Fund vs Conservative Fund<\/b><\/strong><\/p>\r\n<p><strong><b>Growth Fund<\/b><\/strong><\/p>\r\n<ul>\r\n<li>Portfolio Return: 18%<\/li>\r\n<li>Risk-Free Rate: 6%<\/li>\r\n<li>Standard Deviation: 8<\/li>\r\n<\/ul>\r\n<p>Sharpe Ratio = (18 \u2212 6) \/ 8 = 1.5<\/p>\r\n<p><strong><b>Conservative Fund<\/b><\/strong><\/p>\r\n<ul>\r\n<li>Portfolio Return: 12%<\/li>\r\n<li>Risk-Free Rate: 6%<\/li>\r\n<li>Standard Deviation: 2<\/li>\r\n<\/ul>\r\n<p>Sharpe Ratio = (12 \u2212 6) \/ 2 = 3.0<\/p>\r\n<p><strong><b>Interpretation<\/b><\/strong><\/p>\r\n<p>At first glance, the Growth Fund looks more attractive, since it delivers a higher raw return (18% versus 12%). But once adjusted for risk, the Conservative Fund proves far more efficient \u2014 its Sharpe Ratio of 3.0 means it generates three units of excess return for every unit of risk taken, compared to just 1.5 for the Growth Fund. This illustrates that while aggressive funds may look appealing on the surface, conservative funds can sometimes deliver superior risk-adjusted performance, making them more reliable for long-term investors who value stability.<\/p><\/div>\n<div id='text_slider_slide08' class='sa_hover_container' data-hash='Capture-Ratio' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>5.8 Capture Ratio<\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-48852 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Capture-Ratio-1.png\" alt=\"Capture Ratio\" width=\"798\" height=\"891\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Capture-Ratio-1.png 798w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Capture-Ratio-1-269x300.png 269w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Capture-Ratio-1-768x858.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Capture-Ratio-1-45x50.png 45w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Capture-Ratio-1-90x100.png 90w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Capture-Ratio-1-150x167.png 150w\" sizes=\"(max-width: 798px) 100vw, 798px\" \/><\/p>\r\n<p>&nbsp;<\/p>\r\n<p><strong>Anand:<\/strong> What is Capture Ratio?<\/p>\r\n<p><strong>Ridhima:<\/strong> The Capture Ratio shows how a fund performs in both bull and bear markets.<\/p>\r\n<p><strong>Anand<\/strong>: What\u2019s Upside Capture?<\/p>\r\n<p><strong>Ridhima:<\/strong> Upside Capture measures how much a fund gains in rising markets.<\/p>\r\n<p><strong>Anand:<\/strong> And what about Downside Capture?<\/p>\r\n<p><strong>Ridhima:<\/strong> Downside Capture shows how much a fund limits its losses in falling markets. A lower Downside Capture is better.<\/p>\r\n<ul>\r\n<li>The Capture Ratio measures a portfolio\u2019s intrinsic strength in weathering market turbulence and volatility. Because it looks at how a fund performs across different market conditions, it\u2019s fundamentally a measure of how well the fund manager delivers risk-adjusted returns to investors.<\/li>\r\n<li>Expressed as a percentage, it shows whether a fund has underperformed or outperformed a benchmark such as the Nifty or Sensex during market highs and lows, and is typically calculated over 1, 3, 5, or 10-year periods.<\/li>\r\n<\/ul>\r\n<p><strong><b>Since markets move in both directions, this ratio is broken into two components:<\/b><\/strong><\/p>\r\n<h3><strong><b>Upside Capture Ratio<\/b><\/strong><\/h3>\r\n<ul>\r\n<li>This ratio measures a fund manager\u2019s performance during bullish periods \u2014 specifically, how well the fund performed relative to its benchmark index whenever that index rose. It\u2019s calculated by dividing the fund\u2019s return by the index\u2019s return during up-market periods, then multiplying by 100: (Fund\u2019s Return \/ Index Return) \u00d7 100. It\u2019s typically computed using the fund\u2019s monthly or annual returns during periods when the benchmark posted a positive return.<\/li>\r\n<li>A fund manager with an upside capture ratio above 100 has outperformed the index during rallies. An upside capture ratio of 125, for instance, means the manager outperformed the market by 25% during that period.<\/li>\r\n<\/ul>\r\n<p><strong><b>Upside Capture Ratio = (Fund returns during bull runs \/ Benchmark Returns) \u00d7 100<\/b><\/strong><\/p>\r\n<h3><strong><b>Downside Capture Ratio<\/b><\/strong><\/h3>\r\n<ul>\r\n<li>This ratio measures a fund manager\u2019s performance during bearish periods \u2014 how well or poorly the fund did relative to its benchmark whenever that index fell. It\u2019s calculated the same way, by dividing the fund\u2019s return by the index\u2019s return during down-market periods and multiplying by 100.<\/li>\r\n<\/ul>\r\n<h3><strong><b>Downside Capture Ratio = (Fund returns during Bear runs \/ Benchmark Returns) \u00d7 100<\/b><\/strong><\/h3>\r\n<ul>\r\n<li>A downside capture ratio below 100 means the fund lost less than its benchmark during periods when the benchmark was in the red. A downside capture ratio of 82%, for instance, means the fund captured only 82% of the benchmark\u2019s negative performance during that downturn.<\/li>\r\n<li>These ratios are typically published in a mutual fund\u2019s fact sheet, and together they reveal a fund manager\u2019s attitude toward risk and their ability to deliver stronger risk-adjusted returns.<\/li>\r\n<\/ul>\r\n<h3><strong><b>Here is an example:<\/b><\/strong><\/h3>\r\n<p>Consider the capture ratio of the Axis Bluechip Fund on a 3-year basis, sourced from the Morningstar India website.<\/p>\r\n<ul>\r\n<li>The fund has an upside capture ratio of 90, meaning it captured 90% of the index\u2019s upward movement.<\/li>\r\n<li>Its downside capture ratio is 72, meaning it captured only 72% of the index\u2019s downward movement.<\/li>\r\n<\/ul>\r\n<p>In short, the upside capture ratio shows how much of the benchmark\u2019s positive returns a fund captures, while the downside capture ratio shows how much of the benchmark\u2019s negative returns it captures (or, ideally, avoids).<\/p>\r\n<p>So what\u2019s the ideal capture ratio? Investors generally want a fund that captures 100% of the upside, if not more, while keeping the downside capture ratio as low as possible.<\/p>\r\n<p>In practice, a fund rarely excels at both simultaneously \u2014 in the example above, the fund\u2019s upside capture is 90% while its downside capture is 72%. What matters most, whether you\u2019re looking at upside or downside capture, is consistency across multiple years. The Axis Bluechip Fund\u2019s downside capture ratios over 3, 5, and 10 years are 72, 69, and 76 respectively \u2014 a fairly consistent picture \u2014 while its upside capture ratios over the same periods are 90, 91, and 92, equally consistent.<\/p><\/div>\n<div id='text_slider_slide09' class='sa_hover_container' data-hash='Treynor's-Ratio' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>5.9 Treynor&#8217;s Ratio<\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-48853 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Treynors-Ratio.png\" alt=\"Treynors Ratio\" width=\"1103\" height=\"1024\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Treynors-Ratio.png 1103w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Treynors-Ratio-300x279.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Treynors-Ratio-1024x951.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Treynors-Ratio-768x713.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Treynors-Ratio-50x46.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Treynors-Ratio-100x93.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2022\/01\/Treynors-Ratio-150x139.png 150w\" sizes=\"(max-width: 1103px) 100vw, 1103px\" \/><\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p><strong>Anand:<\/strong> Finally what\u2019s Treynor\u2019s Ratio?<\/p>\r\n<p><strong>Ridhima<\/strong>: Treynor\u2019s Ratio measures returns per unit of risk using Beta.<\/p>\r\n<p><strong>Anand:<\/strong> So a Treynor\u2019s Ratio means better?<\/p>\r\n<p><strong>Ridhima:<\/strong> Yes that is right. A Treynor\u2019s Ratio shows that a fund gives more return, for the same level of systematic risk.<\/p>\r\n<ul>\r\n<li>Also known as the reward-to-volatility ratio, Treynor\u2019s Ratio measures the returns earned in excess of what a risk-free portfolio would have delivered.<\/li>\r\n<li>It\u2019s similar to the Sharpe Ratio, but uses Beta rather than standard deviation as its measure of volatility. Beta, as we\u2019ve seen, captures a portfolio\u2019s systematic risk \u2014 how closely a stock or portfolio moves with the index. A portfolio with a Beta greater than 1 is considered aggressive, while one with a Beta below 1 is considered defensive. The market index itself (Nifty or Sensex) always carries a Beta of 1.<\/li>\r\n<li>The higher the Treynor Ratio, the stronger the portfolio\u2019s performance.<\/li>\r\n<\/ul>\r\n<p><strong><b>Treynor Ratio = (Rp \u2212 Rf) \/ Beta of the portfolio<\/b><\/strong><\/p>\r\n<ul>\r\n<li>Treynor\u2019s Ratio is a useful way to compare mutual fund schemes and shortlist suitable ones for investment. A high Treynor Ratio is a favourable sign, indicating that for each unit of risk taken, you\u2019d earn a higher unit of return.<\/li>\r\n<li>For example, suppose one fund has a Treynor Ratio of 2 and another has a ratio of 3. In the first fund, taking on 1% of risk earns you a 2% return; in the second, that same 1% of risk earns you 3%. For the same amount of risk, the second fund offers greater return potential and is, therefore, the better alternative.<\/li>\r\n<\/ul>\r\n<h3><strong><b>When to apply Sharpe and when to apply Treynor ratio?<\/b><\/strong><\/h3>\r\n<ul>\r\n<li>As mentioned earlier, the key difference between Sharpe and Treynor is that the former uses standard deviation as the denominator, while the latter uses Beta. Standard deviation captures a portfolio\u2019s total risk, while Beta captures only its systematic risk.<\/li>\r\n<li>Every business carries unsystematic risks specific to that company or industry, alongside systematic risks \u2014 inflation, interest rates, government policy, and so on \u2014 that apply to the entire economy. As a result, the Sharpe Ratio works better for a portfolio that isn\u2019t well diversified, while the Treynor Ratio is the better measure for portfolios that are well diversified.<\/li>\r\n<\/ul><\/div>\n<\/div>\n<\/div>\n<script type='text\/javascript'>\n\tjQuery(document).ready(function() {\n\t\tjQuery('#text_slider').owlCarousel({\n\t\t\titems : 1,\n\t\t\tsmartSpeed : 400,\n\t\t\tautoplay : false,\n\t\t\tautoplayHoverPause : false,\n\t\t\tsmartSpeed : 400,\n\t\t\tfluidSpeed : 400,\n\t\t\tautoplaySpeed : 400,\n\t\t\tnavSpeed : 400,\n\t\t\tdotsSpeed : 400,\n\t\t\tdotsEach : 1,\n\t\t\tloop : false,\n\t\t\tnav : true,\n\t\t\tnavText : ['Previous','Next'],\n\t\t\tdots : true,\n\t\t\tresponsiveRefreshRate : 200,\n\t\t\tslideBy : 1,\n\t\t\tmergeFit : true,\n\t\t\tautoHeight : true,\n\t\t\tmouseDrag : false,\n\t\t\ttouchDrag : true\n\t\t});\n\t\tjQuery('#text_slider').css('visibility', 'visible');\n\t\tvar owl_goto = 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allowfullscreen=\"allowfullscreen\"><\/iframe><\/div>                    <\/div>\n\t\t                    <\/div>\n        <\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Study Slides Videos 5.1 How To Measure The Risk Involved In Mutual Fund Investors often tend to look at investments only from the perspective of generating maximum returns for the money they are investing. Often, with this viewpoint, they hardly look at their own risk profile and the risk of the investment before making a &#8230; <a title=\"Understand Measures of Risk &#038; Return in Mutual Fund\" class=\"read-more\" href=\"https:\/\/www.5paisa.com\/finschool\/course\/mutual-fund-course\/measuring-risk-return-of-mutual-fund\/\" aria-label=\"Read more about Understand Measures of Risk &#038; Return in Mutual Fund\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":22155,"parent":12525,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"class_list":["post-15958","markets","type-markets","status-publish","format-standard","has-post-thumbnail","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/15958","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets"}],"about":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/types\/markets"}],"author":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/comments?post=15958"}],"version-history":[{"count":22,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/15958\/revisions"}],"predecessor-version":[{"id":59618,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/15958\/revisions\/59618"}],"up":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/12525"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/media\/22155"}],"wp:attachment":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/media?parent=15958"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/categories?post=15958"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}