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People would soon be able to travel from the international airport premises to the Bangalore Cantt station in about 40 minutes, MeitY, I&B and Railway Minister Ashwini Vaishnaw announced at the ET Startup Awards event, Saturday evening, promising citizens a faster alternative to the road commute.Vaishnaw himself took the train from the airport to Cantt station where he reviewed the progress of ongoing projects and the planned ones. The journey, he said, took 35 minutes for him and when commissioned in a few months’ time, may take five extra minutes.The shortest route to the airport from the Cantt railway station is 32 kms, but the traffic jams make the travel time unpredictable. MoS (railways) and Tumakuru Lok Sabha member V Somanna would be leading the project of taking the railway station right into the sprawling airport. Last year he inspected the airport line project and most of the work planned had been done, the Union Minister said.At the Cantt station, he reviewed the progress of the redevelopment work going on at Cantt as well as Yeshwantpur railway stations. The redevelopment at Cantt, the minister said, would result in creation of 18,000 square metres of new land near tracks.The two stations in Bengaluru are among 1137 stations currently being modernized in India in the world’s largest such redevelopment challenge. Such projects used to take decades, the union minister said, and added that this year 1050 stations would be ready and inaugurated.CIRCULAR RAILWAY:The railway board would finalise the detailed project report (DPR) for circular rail for Bengaluru by December. The railways conceptualized the circular railway for Bengaluru last year with seven spokes connecting the city. The lines would connect Bengaluru with surrounding towns and cities like Tumakuru and Mysuru and integrate them closely with Bengauru.Most people living in those cities and working in Bengaluru can commute daily and get back home faster and, added in a light hearted comment, 'enjoy their dosa.' The railway ministry, Vaishnaw said, had a capital expenditure of $29 billion last year and constructed 5300 km of new tracks, which is more than the entire rail network of Switzerland.

Investing in mutual funds involves balancing potential returns with the risks taken to achieve those returns. To evaluate how well a mutual fund performs against the risks incurred, financial metrics like the Treynor ratio are used. This ratio measures the risk-adjusted performance of a fund by focusing on the excess return generated per unit of risk taken, where risk is specifically defined as systematic risk.The Treynor ratio is especially useful for comparing mutual funds within a diversified portfolio, as it accounts for the risk that cannot be eliminated through diversification—also known as market risk or beta.What is the Treynor Ratio?The Treynor ratio measures the returns a mutual fund generates over the risk-free rate in relation to its exposure to systematic risk (beta). It helps investors understand whether a mutual fund is delivering adequate returns for the level of market risk it assumes. A higher Treynor ratio indicates that the mutual fund has been more efficient in generating returns per unit of risk compared to another fund with a lower ratio.The formula for the Treynor ratio is as follows:113982540Where:Actual Return refers to the average return of the mutual fund over a specific period.Risk-Free Rate is the return of a risk-free investment, such as government bonds.Beta measures the sensitivity of the mutual fund to market movements, indicating the fund’s exposure to systematic or market risk.What is Beta and Systematic Risk?Beta is a measure of how much a mutual fund's returns move in relation to the broader market. A beta of 1 means the fund’s performance mirrors the market; a beta greater than 1 indicates the fund is more volatile than the market, while a beta less than 1 suggests it is less volatile than the market.Since beta only considers systematic risk (the risk inherent to the market that cannot be diversified away), the Treynor ratio focuses on how well a fund compensates investors for taking on this market-related risk.How to Interpret the Treynor Ratio?The Treynor ratio helps investors understand whether they are being adequately rewarded for the risk they take on. Here's how to interpret the ratio:Higher Treynor Ratio: A higher Treynor ratio indicates that the fund is generating higher excess returns relative to the market risk it is exposed to. This suggests that the fund manager is effectively managing market risk while delivering good returns.Lower Treynor Ratio: A lower Treynor ratio suggests that the fund is not providing sufficient returns given the level of systematic risk. In such cases, investors may be better off considering other funds or investments with better risk-adjusted performance.Example of the Treynor Ratio:Suppose you’re comparing two mutual funds—Fund A and Fund B. Both have returned 12% over the last year, and the risk-free rate is 4%. However, Fund A has a beta of 1.2, meaning it is more volatile than the market, while Fund B has a beta of 0.8, indicating less volatility.113982645Even though both funds had the same return, Fund B has a higher Treynor ratio because it took on less market risk (beta). This means Fund B provided better risk-adjusted returns than Fund A, making it a more efficient option for an investor looking to maximize returns relative to the amount of risk.Treynor Ratio vs. Sharpe RatioBoth the Treynor ratio and the Sharpe ratio are commonly used to evaluate the risk-adjusted performance of mutual funds, but they differ in how they define risk:Sharpe Ratio: Considers total risk, including both systematic (market) and unsystematic (specific) risk. It uses standard deviation as the risk measure, accounting for all volatility, not just market-related movements.Treynor Ratio: Focuses only on systematic risk (beta), which is associated with the broader market and cannot be diversified away. It ignores unsystematic risk, which can be reduced through diversification.Benefits of Using the Treynor RatioFocus on Market Risk: The Treynor ratio provides a clear picture of how well a mutual fund manages market risk by using beta. This is important for investors who have diversified portfolios and are concerned with a fund's performance relative to the overall market.Simplifies Risk Assessment: By focusing on systematic risk, the Treynor ratio simplifies the relationship between risk and return. It’s easy to interpret for those wanting to know how much return they're receiving for the unavoidable market risks.Useful for Comparing Funds: The Treynor ratio helps investors compare funds with different levels of market volatility, identifying which ones deliver superior risk-adjusted returns.Limitations of the Treynor RatioIgnores Unsystematic Risk: It does not account for unsystematic risk (specific to individual stocks or sectors), which can be important for less-diversified funds.Assumes a Diversified Portfolio: The ratio assumes the portfolio is well-diversified, meaning unsystematic risk has been minimized. If not, it may not fully capture all risks involved.Beta’s Limitations: Beta reflects past market sensitivity and may not predict future volatility. As beta changes over time, the reliability of the Treynor ratio as a risk measure may vary.The Treynor ratio is a valuable tool for assessing the performance of mutual funds in relation to market risk. By focusing on beta, it offers insights into how well a fund generates returns relative to market volatility. However, it should be used alongside other metrics, like the Sharpe ratio, for a complete understanding of a fund’s risk-return profile.

Foreign investors turned net sellers in October, offloading shares worth Rs 27,142 crore in just the first three days of October due to intensifying conflict between Israel and Iran, a sharp rise in crude oil prices, and improved performance of Chinese markets. The outflow came after FPI investment reached a nine-month high of Rs 57,724 crore in September. Since June, Foreign Portfolio Investors (FPIs) have consistently bought equities after withdrawing Rs 34,252 crore in April-May. Overall, FPIs have been net buyers in 2024, except for January, April, and May, data with the depositories showed. Looking ahead, global factors like geopolitical developments and the future direction of interest rates will play a crucial role in determining the flow of foreign investments into the Indian equity markets, Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India, said. According to the data, FPIs made a net withdrawal of Rs 27,142 crore from equities between October 1 and 4, with October 2 being a trading holiday. "The selling has been mainly triggered by the outperformance of Chinese stocks," VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said. The Hang Seng index shot up by 26 per cent per cent in the last one month, and this bullishness is expected to continue since valuations of Chinese stocks are very low and the economy is expected to do well in response to the monetary and fiscal stimulus being implemented by the Chinese authorities, he added. "Escalating geopolitical tensions, driven by the intensifying conflict between Israel and Iran, a sharp rise in crude oil prices, and the improved performance of the Chinese markets, which currently appear more attractive in terms of valuations, were the primary reasons behind the recent exodus of foreign investments from Indian equities," Morningstar's Srivastava said. This, in turn, has contributed to the recent sharp correction in the Indian equity markets. In terms of sector, massive FPIs selling in financials, especially frontline banking stocks, have made their valuations attractive. Long-term domestic investors may utilise this opportunity to buy high-quality banking stocks, Vijayakumar said. In the debt markets, FPIs pulled out 900 crore through the General Limit and invested Rs 190 crore via Voluntary Retention Route (VRR) during the period under review. So far this year, FPIs Invested Rs 73,468 crore in equities and Rs 1.09 lakh lakh crore in the debt market.