Comparative Analysis of Mid & Small-cap Funds Vs Large Cap Funds – A study of top rated fund of India

There has been an emerging trend of increased investment in Mid & small cap in the recent days. The reason is outstanding returns provided by the mid & small cap funds, many funds have in fact outperformed large cap in the recent years, few of the funds claimed to have provided return of 30-40% in last 5-year tenure. The researcher is interested to check the validity of the claims and also interest to know whether the investments in the mid and small cap safer or large cap shall be continued to be believed as a safe haven for investment. Through this paper an attempt is made to evaluate the performance of top rated Mid and small cap mutual funds Vs Large cap funds, on the basis of risk and returns, measured and analysed both absolutely and relatively. For this purpose, risk adjusted performance measures are employed namely Treynor ratio, Sharpe ratio, and Jensen’s alpha. Data is taken for last ten-year duration, to cover the impact of change in business cycle, both at domestic and international level, on the fund performance.