New Delhi, Aug. 2 -- Investors often link equity exposure with higher portfolio risk due to the volatility associated with stock markets. However, historical data suggests that adding equity to a debt portfolio does not always increase volatility. The actual impact depends on the mix of assets and how different asset classes behave together.

The analysis challenges the common belief that increasing equity allocation automatically makes a portfolio riskier.

The analysis of rolling one-year returns from September 2001 to June 2026 by WhiteOak Capital Mutual Fund shows that adding a measured equity allocation to a debt portfolio can improve returns without necessarily increasing volatility.

A 100% debt portfolio delivered an average annua...