The growth of the mutual fund industry in India has been remarkable over the past two decades, with rising financial literacy rates, changes in regulations, and the increasing participation of retail investors, thus making the role of equity mutual funds an essential tool for building wealth. The vast number of schemes offered under different categories such as large-cap funds, mid-cap funds, small-cap funds, flexi/multi-cap funds, and large Motilal Oswal Midcap, Invesco India Mid Cap (mid-cap); Nippon India Small Cap, Bandhan Small Cap (small-cap); Parag Parikh Flexi Cap, Quant Flexi Cap (flexi/multi-cap); Motilal Oswal Large & Mid Cap, Invesco India Large & Mid Cap (large & mid-cap). This analysis utilizes monthly net asset values (NAVs) over a five-year period from March 2021 to March 2026 to determine average return, standard deviation, and Sharpe ratios of individual funds, using Nifty Indices as a comparative benchmark and a risk-free rate of 6.5% (based on prevailing government security yields), enabling users to make comparisons between the performance of different types of funds. This study shows that there are still sizable differences between how different types of funds perform in relation to one another. This framework will be useful to investors, mutual fund managers, and researchers to help them make better investment decisions and validate their decisions empirically in the rapidly growing Indian equities mutual fund industry.
Asees Sahni (Wed,) studied this question.