Stress tests by AMCs: Risk metrics of small, midcap funds in focus

MFs to release info on investor concentration & portfolio turnover ratio

Mutual funds (MFs) are poised to release their inaugural stress test reports later this week but this will necessitate additional disclosures. These will range from investor concentration to portfolio turnover ratio of smallcap and midcap funds.

According to a risk disclosure format that the Association of Mutual Funds in India (Amfi) has shared with fund houses, MFs will have to disclose total investment of the top 10 investors in two active schemes. They will also need to provide volatility metrics, such as the portfolio’s standard deviation and beta, which compares the portfolio’s volatility to a broader index.

The level of investor concentration