Blog · 6 Jul 2026
7 Important Mutual Fund Risk & Return Ratios Every Equity Investor Should Know
Most mutual fund investors look at past returns first.
Most mutual fund investors look at past returns first.
Questions like “Which fund gave the highest 5-year return?”, “Which fund has the highest CAGR?”, or “Which fund has a 5-star rating?” come up all the time. And yes, returns matter. But they are only one part of the picture. Think of two equity mutual funds that both delivered 15% annual returns over the last five years.
Fund A achieved that with relatively steady performance, while Fund B went through sharp ups and downs along the way. Most investors would naturally prefer Fund A, because it gave the same return with less stress. That’s the real point: when it comes to investing, risk matters just as much as return.