Top 3 funds with higher alpha and lower beta
Alpha and Beta are the risk ratios which are used for determining the returns. Alpha is nothing but the excess returns over and above the respective benchmark and is normally considered as measure of value added by the fund manager. Beta is a statistical tool to measure the risk relative to the market that is beta helps investor to analyse risk taken by the fund relative to the market.
Lower beta determines the lower volatility with respect to the market as well as higher alpha gives us an indication of higher performance against the respective benchmark. So, the combination of this equation is considered to be a good investment option as the higher alpha suggest the potential of the fund manager as well as fund holdings of providing returns and lower beta suggest the lower volatility.
We have analysed various equity mutual fund schemes from Equity large-cap, Equity Mid-cap and Equity Small-cap category under this equation. According to the data analysis we have filtered top 3 mutual fund schemes which have a higher alpha and lower beta in each of the category. The equation can be a good parameter to analyse the funds and can be very useful for investors.
