Mutual Funds are prone to a variety of risk factors depending on categorization and thereby their underlying portfolios. Equity Mutual Funds are prone to many risks but the most significant one is market risk. Equity Mutual Funds as a category are considered ‘High Risk’ investment products. While all equity funds are exposed to market risks, the degree of risk varies from fund to fund and depends on the type of equity fund.
Large cap funds that invest in large cap company stocks i.e stocks of well-established companies with sound financials are considered to be the least risky because these stocks are considered to be safer than stocks of mid cap and smaller companies. Low risk equity mutual funds usually have a well-diversified portfolio that
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