Published Paper Details:

In the contemporary financial environment, investors face the dual challenge of maximizing returns while managing risk. Among the multitude of investment avenues available, hedge funds and mutual funds have emerged as dominant global instruments of collective investment. While both seek to create wealth through professional fund management, their objectives, structures, strategies, and risk-return profiles differ significantly. This study titled "Risk and Return Analysis of Hedge Funds: A Comparative Study with Mutual Funds" provides a detailed quantitative and qualitative evaluation of the performance efficiency of these two categories of investment funds. Using real financial data obtained from credible sources such as SEBI, AMFI, Bloomberg Hedge Fund Index, and SP Global SPIVA reports (2013-2023), the paper compares annualized returns, standard deviation, Sharpe ratio, Treynor ratio, and Beta values to understand their relative risk-return dynamics. Findings reveal that hedge funds deliver superior absolute and risk-adjusted returns due to their flexibility and global diversification, but expose investors to greater volatility and limited transparency. Mutual funds, in contrast, offer stable, regulated, and retail-friendly investment opportunities that focus on long-term wealth accumulation. The study concludes that a hybrid investment approach, combining both instruments, can lead to optimal portfolio diversification and improved risk-adjusted performance.