Abstract : The paper will be a comparison of risk-return performance of active-managed mutual funds and passive exchange-traded funds (ETFs) in India based on the effect they have on their investing strategies between 2022 and 2025. The study employs the use of experimental methodology using the analysis of the secondary data and point of interest is the Net Asset Values (NAVs) of the chosen funds of different types and nature including equity, hybrid-equity funds, and hybrid-debt funds. This was in order to establish whether differences in returns are not type of investment dependent as well as to establish whether active management is effective in generating risk-adjusted returns compared to passive management.
To determine the performance, we measured performance in terms of such conventional statistics analysis tools as average return, standard deviation, correlation ratio, beta ratio, Sharpe ratio, and Treynor ratio. These signs helped us to identify both the total and systemic risk and the degree to which the investors are accepting to bear the risk. It stated that the hybrid-equity funds always were at a better risk-adjusted performance, i.e., the balance between risk and higher returns. The ETFs based on equity did well and gave the investors good access to the market although they were more susceptible to changes in the market. The money that was channeled into debt was more stable and was more applicable to the conservative investors even though they had less returns.
The difference between the domains was analyzed by using Analysis of Variance (ANOVA) to establish whether it was significant or not. The results showed that the investment sphere had a strong impact on the fund performance, and the hybrid-equity schemes are superior to others. This conclusion is representative of the significance of the asset allocation and diversification to reduce the risk and maximize profits simultaneously.
The report leads to the increasing body of knowledge on mutual funds and ETFs in the emerging markets by illustrating the importance of passive investment vehicles in the new financial landscape in India. It underlines the fact that risk level of the investors, legal environment and integration of technology will be significant factors which will determine how individuals will invest in future. In general, the research unveils that hybrid solutions and passive tools may be of great importance to improve portfolio management as well as make financial inclusion in India more meaningful.

Keyword : Active-managed mutual funds, Asset allocation, Financial inclusion, Hybrid-debt funds, Hybrid-equity funds, Net Asset Value, Passive ETFs, Risk-adjusted returns, Statistical analysis