A MULTI-FACTOR EMPRICAL ANALYSIS OF COST EFFICIENCY, RETURN CONSISTENCY & VOLATILITY EXPOSURE IN ETFs & MUTUAL FUNDS

In the context of Indian investing, this study provides a thorough empirical comparison of mutual funds and exchange traded funds (ETFs). Cost effectiveness, return consistency, and volatility exposure are its three main concerns. The study assesses how these two instruments perform over a five-year period in a variety of market situations, taking into account the rise in retail investor engagement and the growing popularity of passive methods. Five mutual funds and five exchange-traded funds (ETFs) encompassing the stock, debt, and commodity divisions were chosen by purposive sampling. While secondary data was obtained from reliable sources such as fund databases, SEBI, NSE, and AMFI, primary data was obtained through structured investor surveys to evaluate perceptions and preferences. Performance was assessed using analytical techniques such the Treynor Ratio, Jensen's Alpha, Beta, Sharpe Ratio, Expense Ratio, and Standard Deviation. The findings demonstrate that ETFs are excellent at being transparent and cost-effective, which makes them appropriate for long-term and budget-conscious investors. On the other hand, mutual funds appeal to a wider range of investors due to their professional management and planned investment strategies. This multi-factor study contributes to academic research and regulatory understanding of investment behaviour in India's changing capital markets in addition to helping investors match their financial objectives with appropriate instruments.