Decoding Mutual Fund Growth: The Crisil Rating Effect and Emerging Investor Pattern

Objectives of the Study: This study aims to comparatively analyse midcap and flexicap mutual funds in India by examining (i) the shift in investor preference between the two categories, (ii) the relationship between fund returns and selected risk-adjusted performance measures, and (iii) the influence of CRISIL ratings on the growth of Assets Under Management (AUM). Methodology: The study is based on secondary data obtained from the Association of Mutual Funds in India (AMFI) and CRISIL. A sample of 12 midcap and 25 flexicap mutual funds was selected. Risk-adjusted performance indicators—including standard deviation, beta, Sharpe ratio, Treynor ratio, and Jensen’s Alpha—were computed using five-year return data. Pearson’s correlation analysis was applied to examine relationships between returns and risk measures, while simple linear regression was used to assess the impact of CRISIL ratings on AUM growth. Data analysis was conducted using Jamovi software. Research Findings and Interpretation: The results indicate a clear shift in investor preference towards flexicap mutual funds, reflected in higher SIP inflows. Risk-adjusted measures show a strong positive association with fund returns, whereas volatility indicators exhibit weak or insignificant relationships. Regression results reveal that CRISIL ratings have a significant positive impact on AUM growth. Conclusion: Flexicap mutual funds have emerged as a preferred investment option due to flexibility and superior risk-adjusted performance, while CRISIL ratings play a decisive role in influencing investor behaviour and fund growth.