Question 1

What is the biggest risk for mutual funds?

Accepted Answer

There are many risks associated with funds, but the biggest of them is the uncertainty of the market as it is not in anyone's hand to control it.

Question 2

Are mutual funds more risky than stocks?

Accepted Answer

Since they have direct investments in the equity market, both investors often take on risk. However, mutual funds are a safer investment than stocks since their portfolios are highly diversified and professionally managed, which reduces the risk that comes from individual equities.

Question 3

How to reduce risk in mutual funds?

Accepted Answer

Using the technique of diversification, which means divide and rule helps us to balance our portfolio. It divides the assets into various different sectors that increase the chances of capital gain.

Question 4

What is the relation between risk and return?

Accepted Answer

This works on the formula of greater the price, greater will be the returns. More risky the fund is, more chances are there of its potential growth.

Question 5

Which category of fund has lower risks?

Accepted Answer

Although, each and every fund has its own risk factor. The large-cap funds have lesser risk probability. As they hold a strong presence in the market the risk percentage is lower than other categories.

Ratios	Std Dev	Sharpe	Beta	Alpha
Fund	16.59%	0.55	0.82	3.69
Category	17.35%	0.60	0.82	0.08

Kotak Small Cap Fund - Payout of Income Distribution cum capital withdrawal option - Risk Analysis

Risk Summary

Risk Analysis

Risk Comparison

Market Crash Response Analysis

Frequently Asked Questions