Performance Evaluation of Mutual Funds Scheme in India - An Empirical Study
Performance Evaluation of Mutual Funds Scheme in India - An Empirical Study
Performance Evaluation of Mutual Funds Scheme in India - An Empirical Study
Performance
Evaluation of Mutual
Funds Scheme in India
An Empirical Study
The performance of mutual funds depends on the performance of securities that
make up the portfolio of the mutual fund. Mutual funds pool the money of
investors and then invest this pool in the designated securities. Once this is done,
the investors must understand that the performance of a particular scheme will
depend on the performance of the underlying portfolio. For instance, a scheme
has invested funds in equity shares, and the equity market is booming, then the
performance of the scheme would be good. It may be noted that the performance
of a scheme is restricted by the underlying portfolio and no scheme can rise faster
than the rise in underlying portfolio. Even within a particular category or group of
schemes, say income schemes, the performance of all mutual fund schemes under
that category would not be same. What is required on the part of investors is to
look at each of the schemed and its underlying portfolio. This will help them to
know how and where their money is being invested and about the risk indirectly
taken by them.
Nishant Patel
Stevens Business School, Ahmedabad
3/16/2011
Performance Evaluation of Mutual Funds Scheme in 2011
India
ACKNOWLEDGEMENT
Preparing a project is an arduous task, but I was fortunate enough to get support
from large number of people to whom I shall always remain grateful and those
who have helped me directly or indirectly in completion of the project on
“Performance Evaluation of Mutual Funds Scheme in India – An Empirical
Study”. The project has given me an opportunity to learn many aspects. I am very
grateful to my guide Professor Deepak Krishnan, for giving me this privilege to
work under him and for all his support during the entire duration as well as for his
invaluable guidance that helped me to complete my project.
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I. INTRODUCTION
MUTUAL FUND IS a trust the pools the savings of a number of investors who
share a common financial goal. The money thus collected is then invested in capital
market instruments such as shares, debentures and other securities. The income
earned through these investments and the capital appreciation realized is shared by its
unit holders in proportion to the number of units owned by them. Thus, a mutual fund
is the most suitable investment for the common man as it offers an opportunity to
invest in a diversified, professionally managed basket of securities at a relatively low
cost.
The mutual fund industry plays a significant role in the development of the
economy as well. Its buoyant growth leads to lower intermediation costs,
Professor & Head of the Department, Er. Perumal Manimekalai College of
Engineer, Department of Management studies, Koneripalli, Hosur, Tamil Nadu,
INDIA.
Associate Professor, Alagappa University, Alagappa Institute of Management,
Karikudi, Kancheepuram, Tamil Nadu 630003, INDIA Submitted December 2007;
Accepted April 2010.
More efficient financial markets, increased vibrancy of the capital markets and
higher local ownership of financial assets. If retail investment is directed through
the mutual fund route, it will lead to greater wealth creation in the long run.
Thus, the industry can be one of the causative factors for a healthy economy.
Mutual funds have emerged as an important intermediary in all the capital
markets of the world. The mutual funds play and will continue to play an
important role in the growth of the capital market in India. One of the reasons
for mutual funds becoming popular in such a short period if that they offer low
risk coupled with stability of income and are ideally suited for average and small
investors who, otherwise, probably cannot operate in capital market. Growth of
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Performance Evaluation of Mutual Funds Scheme in 2011
India
mutual funds in India, as well as, in all the capital markets of the world is a
testimony to the fact that mutual funds provide specialized financial securities to
the investors. Mutual funds provide different services to investors for making
investment. Making investment in a mutual fund is more convenient as compared
to dealing in the capital market. So, a mutual fund is a suitable investment for a
common man as it offers an opportunity to invest in a diversified and
professionally managed basket of securities at a relatively low cost.
The relation between risk and return determines the performance of a
mutual fund. As risk is commensurate with return, therefore, providing maximum
return on the investment made within the acceptable associated risk level helps
in demarcating the better performance from the laggards. So, there is always a
tradeoff between risk and return. In the present study these two attributes, viz.,
risk and return have been considered for detailed analysis. This study also
presents an empirical analysis of risk adjusted performance evaluation of mutual
fund schemes based on the Sharpe, Treynor, Jenson and Fama measures.
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3.2 Methodology
To evaluate the investment performance of sample mutual fund schemes, 23
schemes were chosen as per the priority given by the respondents in Dharmapuri
district, Tamil Nadu. Secondary data were used to evaluate the performance of
the selected mutual fund schemes. The study is kept limited to only two fund
categories namely equity fund and income fund.
In this study the Bombay Stock Exchange (BSE) Sensex (100) has been used
as a surrogate for market portfolio and the bank interest rate has been used as a
surrogate for risk-free rate of return which have been accepted as the market
proxy and the risk-free proxy respectively by the researchers as well as
practitioners in India. Performance evaluation models such as Sharpe Ratio,
Treynor Ratio, Jensen Differential Return Measure, Sharpe Differential Return
Measure and Fama's Components of Investment Measure were applied to
evaluate the performance of selected schemes.
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period have been collected from the relevant authorized sources for an in-depth
analysis.
Table
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Management
Co.Ltd.
17. Kotak Bond Regular Income Kotak Mahindra Nov.1999 Mar.2007
Plan Asset Management
Co.Ltd.
18. Prudential ICICI Income Income Predential ICICI Jun.1998 mar.2007
Asset Management
Co.Ltd.
19. Reliance income Fund Income Reliance Capital DEc.1997 Mar.2007
Asset Management
Co.Ltd.
20. Sundaram Bond Saver Income Sundaram BNP Nov.1997 Mar.2007
Paribas AMC Ltd.
21. Tata Income Fund Income Tata Asset Apr.1997 Mar.2007
Management Ltd.
22. UTI- Bond Fund Income UTI Asset Jun.1998 Mar.2007
Management
Co.Ltd.
23. UTI Bond Advantage Income UTI Asset Jul.1999 Mar.2007
Fund LTP Management
Company Ltd.
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IV Empirical Analysis
4.1 Average Annual Risk and Return of Selected Equity Schemes
The rates of return for all the fifteen schemes were calculated on the basis of average
monthly net asset values. The dividend payments were included for determining the net
asset based annual returns. The year wise average returns were calculated and
provided in Table II for all the fifteen schemes.
S.N Scheme Name Average Total
o
2002- 2003 2004- 2005 2006 Total
03 -04 05 -06 -07
1. Can Equity Tax Saver Average 1.29 3.69 1.33 3.18 1.11 1.20
Risk 4.26 4.83 6.71 8.17 9.73 7.15
2. Franklin India Blue ship Fund Average 0.09 7.43 1.85 4.40 1.19 3.04
Risk 3.74 5.12 5.39 4.09 7.40 5.78
3. Franklin India Prima Plus Average 0.35 6.84 2.24 4.56 1.76 3.07
Risk 3.29 4.42 4.84 3.84 7.79 5.52
4 Franklin India Prima Fund Average 0.49 8.22 4.26 4.24 0.00 3.49
Risk 3.65 8.05 5.41 3.35 8.46 6.70
5 HDFC Top 200 Fund Average 0.14 7.46 2.68 4.74 1.02 3.26
Risk 3.42 5.70 5.64 3.52 6.90 5.71
6 Magnum Global Fund Average 1.09 4.24 4.29 5.85 1.84 3.10
Risk 3.69 8.63 6.01 4.58 8.94 6.95
7 Prudential ICICI Tax Plan Average 1.07 7.05 5.55 4.63 0.48 3.40
Risk 3.78 8.41 6.43 4.40 10.38 7.58
8. Prudential ICICI Power Average 0.55 6.98 2.41 4.96 1.41 3.31
Risk 4.44 5.13 5.46 4.46 7.49 5.85
9. ICIC Prudential Growth Plan Average 0.75 6.11 1.93 4.58 1.26 2.68
Risk 4.04 5.13 6.12 4.05 7.23 5.82
10 Reliance Growth Fund Average 1.19 8.32 4.35 5.13 1.55 4.16
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Risk 4.90 6.13 6.02 3.78 8.11 6.34
11. Reliance Vision Fund Average 2.56 7.61 3.02 4.41 1.25 3.79
Risk 5.67 5.99 5.92 3.27 7.69 6.09
12. Tata Growth Fund Average 0.21 6.11 3.55 3.61 0.87 2.84
Risk 3.11 5.44 6.52 4.74 8.50 6.19
13. Tata Equity Opportunities Average 0.31 3.52 1.77 3.28 1.24 1.43
Fund Risk 3.91 7.41 5.50 3.91 8.74 6.32
14. UTI-Growth and Value Fund Average 0.23 7.66 2.10 3.68 0.44 2.87
Risk 3.87 5.85 5.58 3.56 7.63 6.00
15. UTI Equity Tax Saving Plan Average 0.27 3.85 1.38 3.96 0.11 1.90
Risk 3.01 7.35 4.68 4.04 7.76 5.79
The overall annual average risk and return were calculated from the five years data
presented in the same table for all the fifteen schemes. all the fifteen schemes had
yielded positive return. The overall maximum return was from Reliance Growth Fund
which was followed by Reliance Vision Fund. The overall minimum return was from Can
Equity Tax Saver. Prudential ICICI Tax Plan was having the highest risk and Franklin
India Prima Plus was having the lowest risk.
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Table III
Average Annual Risk and Returns of selected Income Scheme
Scheme Name Period Total
2002-03 2003- 2004- 2005-06 2006-
Birla income Plus- Average 0.92 0.78 -0.03
04 05 0.28
07 0.4 0.46
Retail Risk 1.32 0.83, 0.79 0.23 0.34 0.84
Kotak Bond 0.9 0.83 0.19 0.37 "0.54. 0.56.
Plan Risk 1.33 0.81 0.82 0.23 0.28 0.81
Regular Average
Prudential ICICI Average 0.86 0.75 0.04 0.27 0.44 0.47
Income Risk 1.3 0.78 0.73 0.32 0.61 0.83
Reliance Income Average 0.83 0.81 0.25 0.37 0.42 0.53
Fund Risk 1.39 0.75 0.82 0.28 0.39 0.82
Sundaram Bond Average 1.0 0.74 -0.02 0.19 0.34 0.44
Saver Risk 1.37, 0.77 0.92 0.23 0.19 0.87
Tata Income Average 0.61 -3.85 6.71 0.76 0.38 0.93
Fund Risk 1.2 11.19 17.54 1.57 0.17 9.72
UTI-Bond Fund Average 0.81 0.6 0.17 0.63 0.4 0.52
Risk 0.91 0.56 0.82 0.6 0.26 0.68
UT I -Bond Average 0.92 0.8 0.05 0.33 0.4 0.49
Advantage Fund-LTP Risk 1.5 0.86 0.86 0.29 0.16 0.89
The overall annual average risk and return were calculated from the five year data and
presented in the same table for all the eight schemes. All the schemes had yielded
positive returns and risk were from Tata Income Fund There were not many differences
among the schemes on the basis of overall annual average risk and returns.
4.3 Risk and Return of Mutual Fund with Benchmark Portfolios.
To have a meaningful evaluation of the investment performance of mutual fund
schemes their average return and risk are to be compared with the average return and
risk are to be compared with the average return and risk of the benchmark portfolio.
The average return and risk for both the selected mutual fund schemes and the
benchmark portfolio are computed and presented in Table IV Fund Beta (Systematic
risk) and value for Beta are also computed and presented in the same table.
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Table IV present return and risk of mutual fund schemes together with returns
and risk of benchmark portfolio and risk-free return. Normally, the funds are expected
to earn more than risk- free return. But, out of 23 schemes, 4 schemes had not earned
ever more than risk –free return. all the 15 equity schemes had earned more than risk
free return. Out of 23 schemes had not earned even more than the risk free return. Out
of 23 schemes, 11 schemes had not earned more than the market return. Out of 23
schemes, 14 schemes had more risk than market risk. Out of 15 equity schemes, only
one scheme namely Franklin India Prima Plus had less risk than market risk. All the
schemes from income fund had less risk than market risk out of 15 equity schemes,
only one schemes ICICI Prudential Tax Plan had high systematic risk and the remaining
fourteen schemes were reflected a moderate amount of systematic risk. Among the 8
Income schemes, Tata, Income Fund reflected a negative systematic risk. It can be
concluded that he return and risk are not always in conformity with the stated
objectively and the systematic risk free return and average market risk for all the
twenty three schemes were same with 0.506 and 5.485 respectively.
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9 ICICI Prudential Growth 0.506 2.681 2.446 5.771 5.485 0.966 17.492 **
10 Reliance Growth Fund 0.506 4.155 2.446 6.285 5.485 0.965 11.794 **
11 Reliance 0.506 3.792 2.446 6.037 5.485 0.924 11.672 **
Vision Fund
12 Tata Growth Fund 0.506 2.839 2.446 6.139 5.485 0.979 0.766 ns
13 Tata Equity Opportunities 0.506 1.432 2.446 6.262 5.485 0.817 7.729 **
fund
14 UTI Growth & Value 0.506 2.866 2.446 5.945 5.485 0.976 15.598 **
Fund
15 UTI Equity Tax Saving 0.506 1.897 2.446 5.742 5.485 0.882 11.788 **
Plan
Income (Debt) Scheme
16 Birla Income Plus 0.506 0.464 2.446 0.831 5.485 0.015 0.751 ns
17 Kotak Bond Regular Plan 0.506 0.559 2.446 0.805 5.485 0.022 1.124 **
18 ICICI Prudential Income 0.506 0.467 2.446 0.822 5.485 0.023 1.166 ns
19 Reliance Income Fund 0.506 0.531 2.446 0.811 5.485 0.029 1.490 ns
20 Sundaram bond Saver 0.506 0.442 2.446 0.861 5.485 0.012 0.571 ns
21 Tata Income Fund 0.506 0.927 2.446 9.640 5.485 0.323 1.413 ns
22 UTI Bond Fund 0.506 0.517 2.446 0.672 5.485 0.019 1.198 ns
23 Unit Bond Advantage 0.506 0.493 2.446 0.878 5.485 0.017 0.821 ns
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3 ICICI Prudential Income 0.506 0.813
4 Reliance Income Fund 0.506 0.796
5 Sundaram bond Saver 0.506 0.858
6 Tata Income Fund 0.506 9.478
7 UTI Bond Fund 0.506 0.664
8 Unit Bond Advantage 0.506 0.873
Average 0.029 1.888
APp>ARm SDp>SDm 1
AP>ARm>SDp<SDm II
Low Income Schemes Equity Schemes
Return All the I Income Schemes 1. Can Equity Tax Saver
AP>ARm>SDp<SDm III 2. Tat Equity Opportunities fund
3. UTI Equity Tax Saving Plan
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APp>ARm SDp>SDm 1
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11 Reliance 0.544 0.354
Vision Fund
12 Tata Growth Fund 0.380 0.354
13 Tata Equity Opportunities fund 0.148 0.354
14 UTI Growth & Value Fund 0.397 0.354
15 UTI Equity Tax Saving Plan 0.242 0.354
Income (Debt) Scheme
16 Birla Income Plus -0.051 0.354
17 Kotak Bond Regular Plan 0.066 0.354
18 ICICI Prudential Income -0.048 0.354
19 Reliance Income Fund 0.031 0.354
20 Sundaram bond Saver -0.075 0.354
21 Tata Income Fund 0.044 0.354
22 UTI Bond Fund 0.016 0.354
23 Unit Bond Advantage ``` -0.015 0.354
Table VI present the Sharpe ratios for the sample schemes and for the
benchmark portfolios. Out of the 23 Schemes had better Sharpe ratios in comparison to
the relevant benchmark portfolios. Reliance vision is the top performer in the equity
schemes. All the 8 income Schemes had less Sharpe ratio in comparison with relevant
benchmark portfolio. Out of 15 equity schemes, two of them have performed less in
comparison with their relevant benchmark portfolios. All the income schemes have
performed less in comparison with their relevant benchmark portfolios. Though Can
Equity Tax Saver scheme had better Sharpe ration than the relevant benchmark
portfolio, which fell in the forth quadrant.
4.6.2 Application of Treynor Ratio to Evaluate the Performance of Selected Schemes.
Treynor ratio or measure evaluates the performance of the sample schemes with
respect to systematic risk. Table VII present Treynor rations of the Schemes and
benchmark portfolios.
Table VII
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Table Vii presents the Treynor ratios for the selected schemes as well as for the
benchmark portfolio, which fell in the fourth quadrant.
4.6.2 Application of Treynor Ratio to Evaluate the Performance of Selected Schemes.
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Treynor ratio or measure evaluates the selected schemes as well as for the
benchmark portfolios.
Table Vii present the Treynor ratios for the selected schemes as well as for the
benchmark portfolios. It can be seen that out of the 23 schemes, 10 schemes, had
outperformed the benchmark in terms of volatility. Reliance Growth Fund is the top
performer of the equity schemes. Interestingly, among the 10 schemes, 9\ schemes
outperformed in respect of Sharpe ratio too. The only scheme namely Can Equity Tax
Server had offered more return than benchmark in respect of Sharpe ratio.
The result pertaining to Share and Treynor ratio reflect some conflict in
performance ranking. The reason for such a conflict arises due to the fact that Sharpe
ratio takes into accounts the total risk of the portfolio whereas the Treynor ratio
considers only the systematic or the market risk. Thus it is possible that a portfolio
might have outperformed the market in terms of Treynor ratio whereas in terms of
Sharpe ratio it did not. The Reason for this difference is that the portfolio under
consideration may have a relatively larger amount of unique risk. The presence of
unique risk in the portfolio does not affect the Treynor ratio whereas it would affect the
Sharpe ratio. Therefore in order to detect any conflict in performance ranking, the
sample schemes have been ranked in terms of Sharpe and Treynor ratios.
4.6.3 Application of Jensen Measure to Evaluate the Performance of selected Scheme.
The Jensen measure has given a different dimension to the portfolio performance. In
the Jensen measure, Alpha values are computed which indicates the additional return of
the portfolio i.e. the difference between the expected return and actual return and
actual return. Jensen’s alphas, beta and expected return value are given in Table VIII
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Table VIII
Jensen Measures of Selected Mutual Fund Schemes
S Schemes Jenson’s A Jenson’ B Expected
No Return
Equity Schemes
1 Can Equity Tax Saver -1.232 0.992 3.013
2 Franklin India Blue Chip Fund 0.676 0.958 2.535
3 Franklin India Prima Plus 0.787 0.914 2.441
4 Franklin India Prima Fund 1.093 0.976 2.857
5 HDFC Top 200 Fund 0.920 0.945 2.510
6 Magnum Global Fund 0.819 0.912 2.943
7 ICICI Prudential Tax Plan 0.617 1.175 3.163
8 ICICI Prudential Power 0.956 0.951 2.556
9 ICICI Prudential Growth 0.300 0.967 2.548
10 Reliance Growth Fund 1.773 0.967 2.729
11 Reliance 1.490 0.926 2.642
Vision Fund
12 Tata Growth Fund 0.430 0.981 2.678
13 Tata Equity Opportunities fund -0.663 0.819 2.721
14 UTI Growth & Value Fund 0.464 0.977 2.609
15 UTI Equity Tax Saving Plan -0.321 0.882 2.537
Income (Debt) Scheme
16 Birla Income Plus -0.075 0.017 0.539
17 Kotak Bond Regular Plan 0.007 0.024 0.791
18 ICICI Prudential Income -0.087 0.025 0.797
19 Reliance Income Fund -0.034 0.031 0.793
20 Sundaram bond Saver -0.091 0.014 0.811
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21 Tata Income Fund 1.039 -0.319 3.916
22 UTI Bond Fund -0.031 0.021 0.744
23 Unit Bond Advantage ``` -0.051 0.020 0.817
Table VIII present the Jensen measures of the mutual fund schemes. Out of the total
23 schemes, alpha values for 14 schemes were positive thereby indicating superior
performance. IN other words, these schemes had generated returns in excess of
equilibrium return. The value of alphas is an absolute, which indicates differential return
of the portfolio between equilibrium return and actual return. It is noted that the
equilibrium return of a fund is the return that it is expected to earn with the given level
of systematic or market risk. The additional return earned by the fund manager over
equilibrium return can be attributed to his ability to select the securities.
The result indicates alpha values for only three schemes viz. Franklin India
Prima fund, Reliance Growth Fund and Reliance Vision Fund were found to be
statistically significant, thereby implying that these three schemes have generated
above normal returns.
In order to test whether the mutual funds schemes are offering superior risk –
adjusted return or not under Jensen alpha measure, the following null hypothesis was
formulated.
Hypothesis HO : Mutual Fund does not offer superior risk – adjusted returns.
A positive and significant alpha will mean that the schemes provide superior risk
adjusted returns. The result of the study reveals that out of the 23 schemes, only 3
schemes are having positive and significant alphas values. Hence, the hypothesis is
accepted.
4.6.4 Application of Sharpe differential Return measure to Evaluate the performance
of Selected Schemes.
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To analyze the manager’s ability in selecting stocks and his ability to provide
diversification, Sharpe uses the differential return measure. For this, the value of
expected return and actual return are calculated and presented in Table IX
Table IX
Sharpe Differential Return of Selected Mutual Fund Scheme
S Schemes Expected Return Actual Return Differential
No Return
Equity Schemes
1 Can Equity Tax Saver 3.013 1.201 -1.813
2 Franklin India Blue Chip Fund 2.535 3.041 0.505
3 Franklin India Prima Plus 2.441 3.071 0.629
4 Franklin India Prima Fund 2.857 3.491 0.633
5 HDFC Top 200 Fund 2.510 3.26 0.750
6 Magnum Global Fund 2.943 3.10 0.157
7 ICICI Prudential Tax Plan 3.163 3.40 0.237
8 ICICI Prudential Power 2.556 3.310 0.754
9 ICICI Prudential Growth 2.548 2.68 0.132
10 Reliance Growth Fund 2.729 4.16 1.431
11 Reliance 2.642 3.79 1.148
Vision Fund
12 Tata Growth Fund 2.678 2.84 0.162
13 Tata Equity Opportunities fund 2.721 1.43 -1.291
14 UTI Growth & Value Fund 2.609 2.87 0.261
15 UTI Equity Tax Saving Plan 2.537 1.900 -0.637
Income (Debt) Scheme
16 Birla Income Plus 0.539 0.46 -0.079
17 Kotak Bond Regular Plan 0.791 0.56 0.231
18 ICICI Prudential Income 0.797 0.47 0.327
19 Reliance Income Fund 0.793 0.53 0.263
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20 Sundaram bond Saver 0.811 0.44 0.371
21 Tata Income Fund 3.916 0.93 2.986
22 UTI Bond Fund 0.744 0.52 0.224
23 Unit Bond Advantage ``` 0.817 0.49 0.327
Source : Computed from information in Table IV
Table IX present information pertaining to Sharpe’s differential return for mutual fund
schemes. Out of the 23 schemes, 12 schemes reflected positive differential returns,
thereby indicating superior performance. The top two performances are Reliance
Growth Fund and Reliance vision Fund. The remaining 09 schemes showed negative
differential returns indicating that they could not generate return commensurate with
the risk they assumed. A comparison of Share differential returns and Jensen alpha
indicates the impact of selectivity and diversification on the fund’s returns. As revealed
earlier, the Indian mutual funds are not adequately diversified.
The analysis is further extended to pinpoint the reasons for good or bad
performance which also identifies the areas for correction. This is fulfilled by Fama’s
decomposition measures.
4.6.5 Application of Fama’s components to evaluate the performance of
selected schemes.
In order to analyze the selected schemes’ returns under Fama’s components of
investment performance the returns are grouped into four components for the sample
mutual fund schemes are computed and presented in Table X
Table X
Fama’s Break-up of selected Mutual Fund Scheme
S Schemes Diversifiable Impact of Beta Imperfect Net
No Risk (D.R.) Diversification Selectivity
Equity Schemes
1 Can Equity Tax Saver 0.300 1.926 0.581 -1.813
2 Franklin India Blue Chip Fund 0.087 1.859 0.169 0.507
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3 Franklin India Prima Plus 0.083 1.773 0.161 0.626
4 Franklin India Prima Fund 0.236 1.894 0.457 0.635
5 HDFC Top 200 Fund 0.088 1.833 0.171 0.749
6 Magnum Global Fund 0.344 1.770 0.667 0.153
7 ICICI Prudential Tax Plan 0.195 2.279 0.378 0.239
8 ICICI Prudential Power 0.106 1.845 0.205 0.751
9 ICICI Prudential Growth 0.085 1.876 0.166 0.134
10 Reliance Growth Fund 0.179 1.876 0.347 1.426
11 Reliance 0.175 1.796 0.340 1.150
Vision Fund
12 Tata Growth Fund 0.139 1.903 0.269 0.161
13 Tata Equity Opportunities fund 0.323 1.589 0.627 -1.289
14 UTI Growth & Value Fund 0.107 1.896 0.207 0.257
15 UTI Equity Tax Saving Plan 0.164 1.712 0.319 -0.640
Income (Debt) Scheme
16 Birla Income Plus 0.539 0.46 -0.079 -0.336
17 Kotak Bond Regular Plan 0.791 0.56 0.231 -0.232
18 ICICI Prudential Income 0.797 0.47 0.327 -0.330
19 Reliance Income Fund 0.793 0.53 0.263 -0.262
20 Sundaram bond Saver 0.811 0.44 0.371 -0.369
21 Tata Income Fund 3.916 0.93 2.986 -2.990
22 UTI Bond Fund 0.744 0.52 0.224 -0.227
23 Unit Bond Advantage ``` 0.817 0.49 0.327 -0.323
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awareness on various mutual fund schemes and their risk and returns. Lack of deeper
distribution networks and channels, domination of the banking sector, impact of global
developments, operational hassles, lack of investment advisors are the major challenges
that are being faced by the Indian mutual fund industry. In spite of the above
bottlenecks, the mutual fund industry is having a good prospect in our country. The
factors such as support from SEBI, declining bank deposits' interest rate in the recent
past, opening of the market to the foreign investors, the entry of large domestic
institutional investors, increased focus on product innovation, security and liquidity, tax
concession would go a long way in making mutual funds an increasingly popular,
lucrative and cost efficient vehicle for investment. If mutual funds ensure, creating
awareness among retail investors, controlling operational costs, deeper penetration in
the rural areas, curbing unethical practices, spreading the mutual fund culture,
maintaining transparency and flexibility and creating a good rapport with the investors,
their future will be very bright.
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Agarwal, Peeush Ranjan, (2003), "Mutual Funds", Orient Law House, Delhi, 2003.
Ansari, M.N.A., (1993), "Mutual Funds in India", -The Charted Accountant, August
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