Association between Portfolio Allocation and Fund Performance: An Evaluation with Special Reference to Top Rated Mid Cap Equity Funds

In a portfolio, proper allocation of assets helps to balance the risk by dividing assets among major categories such as cash, bonds, stocks, real estate and derivatives. Globally renowned business author Michael LeBoeuf says that the key to successful investment can be summoned up in just two words: asset allocation. Companies are categorized on the basis of their market capitalization into three tiers- large cap, small cap and midcap. Mid Cap Mutual funds aim at generating returns whch beat the benchmark during market highs. They are riskier than large cap mutual funds due to high volatility. This paper attempts to study the association of portfolio allocation and fund performance of top rated mid cap equity funds.