A Comparative Study On Performance of Selected Mutual Funds in India
A Comparative Study On Performance of Selected Mutual Funds in India
A Comparative Study On Performance of Selected Mutual Funds in India
Y. Maheswari
Assistant Professor
Department of Management Studies
Sri Venkateswara College of Engineering
Karakambadi Road, Tirupati-517507
Email:maheswari.y@svcolleges.edu.in
Abstract
In India capital market blesses with an assortment of venture options in contrast to the investors,
to help them to put resources into various venture apparatuses and to make certain the
productive return. Alongside different range financial items, mutual fund ensures the greatest
return and least dangers to the financial specialists. Improvement of different mutual fund
schemes in the Indian capital market has end up being one of the most reactant venture road in
producing noteworthy speculation development .The Asset the executives organizations are
taking overwhelming part in financial related abundance and they advance speculation practice
among the investors at present there are 44 Asset Management Companies (AMCs) contain the
mutual fund industry. In this unique circumstance, close observing and execution assessment
of mutual funds has gotten progressively fundamental. This Mutual fund industry has seen
brilliant development in recent years. This investigation is planned for assessing execution of
mutual funds and furthermore to reviewing the job of advantage the management companies in
reference to public and private sector. The primary goal of this investigation work is to
contemplate money related execution of selected mutual fund schemes through the factual
parameters, for example, (beta, standard deviation, treynor's measure, Sharpe ratio). The
findings of this study will supportive to investors for their investment choices in future.
Keywords: Mutual Fund, Financial execution, venture, Return, Risk, Net Asset Value.
1. INTRODUCTION
A mutual fund is an expertly overseen firm of collective investments that pools cash from
numerous investors and puts it in stocks, bonds, short-term money market instruments, as well
as different securities. Mutual funds have become priceless instrument for a wide scope of
speculators, from people looking to put something aside for retirement to refined socialites
concentrated on protecting their assets and businesspeople to make wealth. Mutual Fund is a
trust that pools the reserve funds of various investors who share a typical monetary objective.
Anyone with an investible overflow of as little as two or three thousand rupees can put
resources into mutual fund units as indicated by their expressed objective and strategy. Mutual
Fund Company pools cash from a gathering of individuals with normal speculation objectives
to purchase securities, for example, stocks, bonds, money market instruments, a combination
of these instruments, or significantly different assets so as to receive the reward of enhancement
and expertly oversaw container of protections at a moderately ease. In a mutual fund, the fund
manager , who is likewise notable as the portfolio manager, trades the funds underlying
securities, acknowledging capital gains or losses, and gathers the dividend or interest income.
The profits are passed along to the investors. The price of a share of the mutual fund, known as
the net asset value (NAV), which is determined on day by day base, in light of the absolute
estimation of the mutual fund divided by the quantity of outstanding shares currently issued. In
GRAPH .1
RATE OF RETURNS OF MUTUAL FUNDS IN SELECTED AMC’s DURING 2017-
2019
GRAPH -2
RATE OF RETURN OF RELIANCE AND ITS BENCHMARK
INTERPRETATION
Reliance is providing 18.94% of returns is 1st year and 81.4% of returns in 2nd year whereas its
benchmark is providing less returns than RELIANCE.
TABLE-3
RATE OF RETURN OF UTI AND ITS BENCHMARK
AMC 1M 3M 6M 9M 1Y 2Y
GRAPH-3
RATE OF RETURN OF UTI AND ITS BENCHMARK
GRAPH-4
RATE OF RETURN OF BIRLA AND ITS BENCHMARK
AM (RELIANCE) = (18.94+81.40)/2=50
AM (UTI) = (8.29+48.38) /2=28
AM (BIRLA) = (5.41+32.56) /2=19
AM (NIFTY) = (10.03+36.32) /2=23
AM (BSE100) = (7.95+36.16) /2=22
TABLE-6
SYSTEMATIC RISK ANALYSIS OF RELIANCE
YEAR S&P CNX RELIANCE XY X2
NIFTY RETURNS(Y)
RETURNS(X)
2017-18 10.03 18.94 189.97 100.6
2018-19 36.32 81.40 2956.5 1319.1
TOTAL 46.35 100.34 3146.47 1419.7
TABLE-7
SYSTEMATIC RISK ANALYSIS OF UTI
YEAR S&P CNX UTI XY X2
NIFTY RETURNS(Y)
RETURNS(X)
2017- 7.95 8.29 65.91 63.2
18
2018- 36.16 48.38 1749.4 1307.6
19
TOTAL 44.11 56.67 1815.3 1370.8
TABLE-8
SYSTEMATIC RISK ANALYSIS OF BIRLA
YEAR S&P CNX BIRLA XY X2
NIFTY RETURNS(Y)
RETURNS(X)
2017- 10.03 5.41 54.26 100.6
18
2018- 36.32 32.56 1182.6 1319.1
19
Electronic copy available at: https://ssrn.com/abstract=3615774
TOTAL 46.35 37.97 1236.8 1419.7
INTERPRETATION
RELIANCE: Reliance average rate of return for 2years is 50%. Average risk rate for 2 years is
31.22%
UTI: UTI average rate of return for 2years is 28%. Average risk rate for 2 years is 20.02%
BIRLA: BIRLA average rate of return for 2years is 19%. Average risk rate for 2 years is
13.57%
S&P CNX NIFTY: S&P CNX NIFTY average rate of return for 2years is 23%. Average risk
rate for 2 years is 13.15%.
BSE100: BSE100 average rate of return for 2years is 22%. Average risk rate for 2 years is
14.10%.
BETA ANALYSIS
FORMULA OF BETA
TABLE-9
SYSTEMATIC RISKS OF RELIANCE, UTI AND BIRLA USING BETA
AMC BETA
RELIANCE 2.38
UTI 1.42
BIRLA 1.033
GRAPH -9
SYSTEMATIC RISK OF RELIANCE, UTI AND BIRLA
Interpretation
RELIANCE: Here the Beta of Reliance is 2.38 this indicates double better than its benchmark.
It means RELIANCE is providing Rs.138 excess than its benchmark returns of every Rs.100.
UTI: The Beta of UTI is 1.42 this indicates moderately better than its benchmark. It means UTI
is providing Rs.42 excess than its benchmark returns of every Rs.100.
BIRLA: The Beta of BIRLA is 1.033 this indicates double better than its benchmark. It means
RELIANCE is providing Rs.33 excess than its benchmark returns of every Rs.100.
RELIANCE 18.06
UTI 14.78
BIRLA 11.65
GRAPH -10
TREYNORS RATIO OF RELIANCE, UTI AND BIRLA
INTERPRETATION
RELIANCE: The Treynors ratio is 18.06, which is higher than its selected AMC’s
UTI: Here the Treynors ratio is 14.78, it is moderately lower than Reliance
BIRLA: Treynors ratio is 11.65, so it is lower than RELIANCE & UTI
UTI 1.05
BIRLA 0.87
GRAPH-11
SHARPE’s RATIO OF RELIANCE, UTI AND BIRLA
5. FINDINGS
➢ RELIANCE one month returns are 8.89%,.those are higher than its Benchmark and
other two AMC’s. UTI is providing negative returns in the first month of 2018 and
lesser than its Benchmark i.e., BSE 100. BIRLA is giving 2.52% higher than its
Benchmark i.e., C&P SNX Nifty.
➢ One Month returns of each AMC and Benchmark is RELIANCE 9.10%, UTI 0.17%,
BIRLA 0.47% S&P CNX Nifty3.29%, BSE 100 -1.86% by this we can tell that
RELIANCE is giving higher returns than its Benchmark and other two AMC’s. UTI is
providing lesser than its Benchmark, BIRLA is giving lesser than its Benchmark.
➢ One Year returns of RELIANCE is 18.94% for one year RELIANCE is giving higher
returns than its Benchmark and other two AMC’s. UTI is providing higher returns
than its Benchmark; BIRLA is giving lesser returns than its Benchmark.
➢ Two years returns of RELIANCE 81.40%, here RELIANCE is giving higher returns
than its Benchmark and other two AMC’s. UTI is providing higher returns than its
Benchmark; BIRLA is giving lesser returns than its Benchmark.
➢ Risk rate of RELIANCE i.e., standard deviation is 44.17%Risk rate of UTI i.e., standard
deviation is 28.35%Risk rate of Birla i.e., standard deviation is 19.2% by this we can
know that RELIANCE is providing higher returns with higher risk. UTI is providing
medium returns with medium risk and BIRLA is providing lower returns with lower
risk.
➢ Systematic risk i.e., Beta of each AMC is RELIANCE 2.38, UTI 1.42, BIRLA 1.033
By this we can know that RELIANCE is doing double better than its Benchmark, UTI
is doing better than its benchmark, BIRLA is doing as equal to its Benchmark.
➢ Sharpe ratio of each company is RELIANCE 0.97, UTI 0.74, and BIRLA 0.63. The
higher the Sharpe ratio the better the performance of fund so hear RELIANCE is
yielding higher Sharpe ratio than other two AMC’s.
6. Conclusion
The study is very pertinent in today’s financial market context and will form basis for the
performance evaluation of the mutual funds in future also .This study helped the investigator
in understanding the different categories of mutual fund, the nature of the market, and the best
performing mutual fund from a selected pool of mutual fund. This empowered the specialist in
proposing the retail investor the best mutual fund company to invest his or her money. The
performance of mutual fund are estimated by various performance evaluation technique like
Ranking, Average Return, Standard Deviation, Sharpe Ratio and outcome from an evaluation
will let the investor to contribute access to the correct categories of mutual fund.
Electronic copy available at: https://ssrn.com/abstract=3615774
7. References
1. Bhalla, V.K. Security analysis and portfolio management pp 141; 149
2. Chander, Ramesh (Dec.2002).“Performance Appraisal of Mutual Funds in India”, Vol. XIV,
No. 4,Financial Express.
3. Fisher, Donald E., Jorden, Ronald J., (1995).“Security Analysis and Portfolio Management”,
Prentice Hall of India Pvt. Ltd., New Delhi.
4. Nimalathan, B., R. Kumar Gandhi; ―Mutual fund financial performance analysis, excel
international journal of multi disciplinary management studies, vol. 2 pp 91, 96.
5. Pandey I.M., (1995). “Financial Management”, Vikas Publishing Houses Pvt. Ltd., New
Delhi.
6. Sathya swaroop debasish; ―Investigating performance of equity based mutual fund schemes
in Indian scenario. pp.2,3
Author Profile