Risk Management

Mitigating Risks, Maximizing Returns – Smart Risk Management for Smarter Investments.

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What is Risk Management?

Is the systematic process of identifying, assessing, and mitigating potential risks that could adversely affect the performance of the fund. Since mutual funds pool money from multiple investors to invest in a diversified portfolio of assets (stocks, bonds, etc.), managing risk is crucial to protect investors’ capital and optimize returns.

Capital Preservation: Protecting the invested principal from significant losses.
Return Optimization: Balancing risk to achieve consistent, long-term growth.
Volatility Control: Reducing fluctuations in the fund’s Net Asset Value (NAV).
Regulatory Compliance: Ensuring adherence to financial regulations and internal risk policies.
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Types of Risks in Mutual Funds

Market Risk (Systematic Risk):The risk of losses due to market-wide factors like economic downturns, political instability, or natural disasters.

Credit Risk (Default Risk):he risk that issuers of bonds or debt instruments may default on their obligations.

Interest Rate Risk: The risk of changes in interest rates affecting the value of fixed-income securities.

Liquidity Risk: The risk of not being able to buy or sell assets quickly without significant price changes.

Operational Risk: The risk arising from failures in internal processes, systems, or human errors.