Which of the funds has the most market risk?
Generally, equity funds are known to inherently carry the highest risk, followed by hybrid funds and, finally, debt funds. There can be variations in risk levels within the category of equity funds, too.
Generally, equity funds are known to inherently carry the highest risk, followed by hybrid funds and, finally, debt funds. There can be variations in risk levels within the category of equity funds, too.
Equities are generally considered the riskiest class of assets. Dividends aside, they offer no guarantees, and investors' money is subject to the successes and failures of private businesses in a fiercely competitive marketplace. Equity investing involves buying stock in a private company or group of companies.
Market risk refers to the potential for an overall decline in the financial markets, which can impact the value of the investment in mutual funds. This risk arises from various factors such as economic conditions, political events, interest rates, inflation, and global trends.
What's the biggest risk in the markets right now? The simple answer here is the one everyone has been preparing for over the past 24 months — a recession. In the post-WWII era, the U.S. economy has slipped into a recession roughly once every 5 years or so, on average.
| Fund Name | Return Since Inception | Expense Ratio |
|---|---|---|
| Parag Parikh Flexi Cap fund | 18.1% | 1.94% |
| Nippon India Value Fund | 15.3% | 2.03% |
| Tata Digital India Fund | 18.9% | 2.08% |
| Mirae Asset Emerging Bluechip Fund | 20.1% | 1.69% |
| Fund Name | Category | Risk |
|---|---|---|
| Mirae Asset Overnight Fund | Debt | Low |
| Axis Overnight Fund | Debt | Low |
| Kotak Equity Arbitrage Fund | Hybrid | Low |
| Nippon India Arbitrage Fund | Hybrid | Low |
Sectoral funds: These are the riskiest category of equity mutual funds which invest a minimum of 80% of their portfolio in companies belonging to the same sector. Low diversification adds to their overall risk with returns dependent on the performance of a single sector.
A beta of less than 1.0 indicates that the fund NAV will be less volatile than the benchmark index. A beta of more than 1.0 indicates that the investment will be more volatile than the benchmark index. It is an aggressive fund that will move up more than the benchmark, but the fall will also be steeper.
The most common types of market risk include interest rate risk, equity risk, commodity risk, and currency risk.
Do mutual funds have market risk?
Market Risk
Depending upon the specific assets held, a mutual fund might face general market risks based on economic or political conditions, natural disasters and other systemic events with broad impact, such as terrorist-related incidents, which could impact the value of your assets.
Market risk is simply the possibility the market or economy will decline, causing individual investments to lose value regardless of the performance or profitability of the issuing entity.
Given the numerous reasons a company's business can decline, stocks are typically riskier than bonds. However, with that higher risk can come higher returns.
Market risk is the risk of losses on financial investments caused by adverse price movements. Examples of market risk are: changes in equity prices or commodity prices, interest rate moves or foreign exchange fluctuations.
Market risk refers to the effect that changing interest rates have on the present value of a fixed-income security, and can also be referred to as interest rate risk. There is an inverse relationship between interest rates and price. As interest rates rise, the value of a security falls.
- Cryptocurrency. Cryptoassets are considered extremely risky, though there is the potential for significant gains. ...
- Individual Stocks. ...
- Initial Public Offerings (IPOs) ...
- Venture Capital or Angel Investing. ...
- Real Estate.
| Mutual Fund Name | Fund Size (in Rs.) | 5- Year Returns |
|---|---|---|
| ICICI Prudential Multi Asset Fund | ₹ 27,924 Crores | 19.01% |
| Edelweiss Aggressive Hybrid Fund | ₹ 1,052 Crores | 17.86% |
| Baroda BNP Paribas Aggressive Hybrid Fund | ₹ 875 Crores | 17.41% |
| Canara Robeco Equity Hybrid Fund | ₹ 9,278 Crores | 16.11% |
- Kotak Flexicap Fund Direct Growth. ...
- Bandhan Flexi Cap Fund-Direct Plan-Growth. ...
- Navi Flexi Cap Fund Direct Growth. ...
- Canara Robeco Flexi Cap Fund Direct Plan Growth Option. ...
- Sundaram Flexi Cap Fund Direct Growth. ...
- Samco Flexi Cap Fund Direct Growth. ...
- SBI Flexicap Fund Direct Growth.
- Certificates of deposit (CDs) and share certificates.
- Money market accounts.
- Treasury securities.
- Series I bonds.
- Municipal bonds.
- Corporate bonds.
- Money market funds.
- Dividend stocks.
Money Market Mutual Funds
Money market funds are ultra low-risk mutual funds that invest in securities with short maturity periods, making them among the lowest-risk investments available outside of government bonds.
What is Vanguard's least risk fund?
Money market funds
A low risk fund that aim to preserve rather than grow your savings – by investing in things like short-term bonds and other money market instruments. Learn more about money market funds.
Stocks offer larger potential returns than mutual funds, but the trade-off is increased risk. Stocks can be a smart investment if you have a higher risk tolerance, want control over your trading decisions, and are comfortable conducting your own fundamental research or technical analysis to pick investments.
- Motilal Oswal Balance Advantage Fund. ...
- ICICI Prudential Income Optimizer Fund (FOF) ...
- Bandhan Balanced Advantage Fund. ...
- DSP Dynamic Asset Allocation Fund. ...
- ICICI Prudential Regular Savings Fund. ...
- Baroda BNP Paribas Conservative Hybrid Fund.
Mutual fund companies are well regulated
All mutual fund houses operate under stringent regulations to protect every investor's interests. These regulations are put in place by SEBI (Securities and Exchange Board of India), a government agency responsible for the supervision and functioning of the capital markets.
A mutual fund provides diversification through exposure to a multitude of stocks. The reason that owning shares in a mutual fund is recommended over owning a single stock is that an individual stock carries more risk than a mutual fund. This type of risk is known as unsystematic risk.
