How different debt-equity combinations affect returns and risks?

A 25-year study by WhiteOak Capital Mutual Fund reveals that adding equity to a pure debt portfolio improves returns while initially reducing risk. A 90-10 debt-equity mix delivered 7.97% returns with lower volatility (5.76%) than 100% debt (6.77% return, 6.37% volatility). Beyond 20% equity, returns grow further, but risk escalates rapidly, hitting 25.35% volatility for pure equity.