New Delhi, Oct. 23 -- Investors often assume that a 100% debt portfolio minimises risk and volatility. However, that may not always be the case. A 25-year study reveals how adding equity funds could reduce portfolio volatility while improving average returns.

WhiteOak Capital Mutual Fund's latest "Chemistry of Investing" study examines how different combinations of debt and equity have historically influenced portfolio risk and return outcomes. Here's what you need to know.

The study compares portfolios with different allocations to debt and equity, using the CRISIL 10 Year Gilt Index for debt and the BSE Sensex TRI for equity. It considers average one-year rolling returns and standard deviation (volatility) for various debt-equity comb...