Stress testing by AMCs: risk metrics of small, mid-cap funds in focus

Mutual funds (MFs) are set to release their first stress test reports later this week, but this will necessitate additional disclosures. These range from investor concentration to the portfolio turnover rate of small cap and mid cap funds.

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

The level of investor concentration