VSRD International Journal of Business and Management Research, Vol.

IV
e-ISSN : 2231-248X, p-ISSN : 2319-2194 VSRD International Journals :
RESEARCH ARTICLE
A STUDY ON MUTUAL FUND PERFORMANCE EVALUATION
1,
Assistant Professor,
JSSCMS, SJCE,
*Corresponding
Performances of mutual funds are analyzed using various statistical measures. The present study aims to Evaluating the Perfor
of few selected Growth option Mutual funds sch
September 2012. The study uses sample of Public
differences in portfolio diversification and variable effects of diversification on investment performance for the period. The study uses
Return method, Beta, Standard Deviation, Sharpe ratio, Treynor ratio, Jenson measure, CAGR, and M
Keywords: Mutual Funds, Return Method, Beta, Standard

1. INTRODUCTION
A mutual fund serves as a link between the investor and
the securities market by mobilizing savings fro
investors and investing them in the securities market to
generate returns. Thus, a mutual fund is akin to portfolio
management services (PMS). Although, both are
conceptually same, they are different from each other.
Portfolio management services are
worth individuals; taking into account their risk profile,
their investments are managed separately.
A mutual fund is a financial intermediary that pools the
savings of investors for collective investment in a
diversified portfolio of securities. A fund is mutual as all
of its returns, minus its expenses, are shared by the funds
investors. The Securities and Exchange Board of India
(Mutual Funds) Regulations, 1996 defines a mutual fund
as a fund established in the form of a trust t
through the sale of units to the public or a section of the
public under one or more schemes for investing in
securities, including money market instruments.
According to the above definition, a mutual fund in India
can raise resources through sale of units to the public. It
can be set up in the form of a Trust under the Indian Trust
Act.
In case of mutual funds, savings of small investors are
pooled under a scheme and the returns are distributed in
the same proportion in which the investment
the investors/unit-holders. Mutual fund is a collective
savings scheme. Mutual funds play an important role in
mobilizing the savings of small investors and channelizing
the same for productive ventures in the Indian economy.
A mutual fund is a professionally managed investment
company that combines the money of many individuals
and invests this pooled money in a wide variety of
different securities. It is by pooling the money of many
individuals that mutual funds are able to provide the
diversification and money management (along with many
other advantages) that were once reserved only for the
wealthy.
VSRD International Journal of Business and Management Research, Vol. IV Issue III March 2014
VSRD International Journals : www.vsrdjournals.com
A STUDY ON MUTUAL FUND PERFORMANCE EVALUATION
1
Nalina K.B.* and
2
Anusha P. Kottur
Assistant Professor,
2
Scholar,
1,2
Department of Business Management,
JSSCMS, SJCE, Mysore, Karnataka, INDIA.
*Corresponding Author: kbnalina@yahoo.co.in
ABSTRACT
Performances of mutual funds are analyzed using various statistical measures. The present study aims to Evaluating the Perfor
of few selected Growth option Mutual funds schemes on the basis of their daily NAV recorded in the period starting on April 2009 to
September 2012. The study uses sample of Public-sector and Private-sector mutual funds based on Net Assets to investigate the
nd variable effects of diversification on investment performance for the period. The study uses
Return method, Beta, Standard Deviation, Sharpe ratio, Treynor ratio, Jenson measure, CAGR, and M
Mutual Funds, Return Method, Beta, Standard Deviation, Sharpe Ratio, Trevnor Ratio, etc.
A mutual fund serves as a link between the investor and
the securities market by mobilizing savings from the
investors and investing them in the securities market to
generate returns. Thus, a mutual fund is akin to portfolio
management services (PMS). Although, both are
conceptually same, they are different from each other.
offered to high net
worth individuals; taking into account their risk profile,
their investments are managed separately.
A mutual fund is a financial intermediary that pools the
savings of investors for collective investment in a
securities. A fund is mutual as all
of its returns, minus its expenses, are shared by the funds
investors. The Securities and Exchange Board of India
(Mutual Funds) Regulations, 1996 defines a mutual fund
as a fund established in the form of a trust to raise money
through the sale of units to the public or a section of the
public under one or more schemes for investing in
securities, including money market instruments.
According to the above definition, a mutual fund in India
gh sale of units to the public. It
can be set up in the form of a Trust under the Indian Trust
In case of mutual funds, savings of small investors are
pooled under a scheme and the returns are distributed in
the same proportion in which the investments are made by
holders. Mutual fund is a collective
savings scheme. Mutual funds play an important role in
mobilizing the savings of small investors and channelizing
the same for productive ventures in the Indian economy.
a professionally managed investment
company that combines the money of many individuals
and invests this pooled money in a wide variety of
different securities. It is by pooling the money of many
individuals that mutual funds are able to provide the
ersification and money management (along with many
other advantages) that were once reserved only for the
Professional money managers take this pool of money and
invest it in a wide variety of stocks, bonds, or other
securities depending on the
of the particular fund. It is the investment objective of the
fund that guides the manager in selecting the various
securities for the fund. It is the investment objective of the
mutual fund that also guides the investor on w
to invest in. Since different investors have different
objectives, there are a number of different kinds of mutual
funds, i.e., some mutual funds may provide monthly
income while others seek long
Mutual funds can be cl
investment objective. Some of the classifications include
money market funds, growth funds, balanced funds,
income funds, and many others.
Fund has a predetermined investment objective that tailors
the fund's assets, regions of
strategies. At the fundamental level, there are various
types of mutual funds. All mutual funds are variations of
these three asset classes. For example, while equity funds
that invest in fast-growing companies are known as
growth funds, equity funds that invest only in companies
of the same sector or region are known as specialty funds.
Equity Funds: Funds that invest in stocks represent the
largest category of
mutual funds. Generally,
the investment objective
of this class of funds is
long-term capital growth
with some income. There
are however many
different types of equity
funds because there are
many different types of
equities. A great way to understand the universe of equity
funds is to use a style box, an example of which is below.
The idea is to classify funds based on both the size of the
companies invested in and the investment style of the
/ 65
A STUDY ON MUTUAL FUND PERFORMANCE EVALUATION
Department of Business Management,
Performances of mutual funds are analyzed using various statistical measures. The present study aims to Evaluating the Performance
emes on the basis of their daily NAV recorded in the period starting on April 2009 to
sector mutual funds based on Net Assets to investigate the
nd variable effects of diversification on investment performance for the period. The study uses
Return method, Beta, Standard Deviation, Sharpe ratio, Treynor ratio, Jenson measure, CAGR, and M-square.
Deviation, Sharpe Ratio, Trevnor Ratio, etc.
Professional money managers take this pool of money and
invest it in a wide variety of stocks, bonds, or other
securities depending on the investment objective, or goal,
of the particular fund. It is the investment objective of the
fund that guides the manager in selecting the various
securities for the fund. It is the investment objective of the
mutual fund that also guides the investor on which funds
to invest in. Since different investors have different
objectives, there are a number of different kinds of mutual
funds, i.e., some mutual funds may provide monthly
income while others seek long-term capital appreciation.
Mutual funds can be classified according to their
investment objective. Some of the classifications include
money market funds, growth funds, balanced funds,
income funds, and many others.
Fund has a predetermined investment objective that tailors
the fund's assets, regions of investments and investment
strategies. At the fundamental level, there are various
types of mutual funds. All mutual funds are variations of
these three asset classes. For example, while equity funds
growing companies are known as
h funds, equity funds that invest only in companies
of the same sector or region are known as specialty funds.
that invest in stocks represent the
equities. A great way to understand the universe of equity
, an example of which is below.
The idea is to classify funds based on both the size of the
companies invested in and the investment style of the
Nalina K.B. and Anusha P. Kottur VSRDIJBMR, Vol. IV (III) March 2014 / 66

manager. The term value refers to a style of investing that
looks for high quality companies that are out of favor with
the market. These companies are characterized by
low P/E and price-to-book ratios and high dividend yields.
The opposite of value is growth, which refers to
companies that have had strong growth in earnings, sales
and cash flow. A compromise between value and growth
is blend, which simply refers to companies that are neither
value nor growth stocks and are classified as being
somewhere in the middle.
For example, a mutual fund that invests in large-
cap companies that are in strong financial shape but have
recently seen their share prices fall would be placed in the
upper left quadrant of the style box (large and value). The
opposite of this would be a fund that invests in startup
technology companies with excellent growth prospects.
Such a mutual fund would reside in the bottom right
quadrant (small and growth).
Bond/Income Funds: Income funds are named
appropriately: their purpose is to provide current income
on a steady basis. When referring to mutual funds, the
terms "fixed-income,""bond," and "income" are
synonymous. These terms denote funds that invest
primarily in government and corporate debt. While fund
holdings may appreciate in value, the primary objective of
these funds is to provide a steady cash flow to investors.
As such, the investors for these funds consist of
conservative investors and retirees.
Bond funds are likely to pay higher returns than
certificates of deposit and money market investments, but
bond funds are risky. Because there are many different
types of bonds, bond funds can vary dramatically
depending on where they invest. For example, a fund
specializing in high-yield junk bonds is much more risky
than a fund that invests in government securities.
Furthermore, nearly all bond funds are subject to interest
rate risk, which means that if rates go up the value of the
fund goes down.
Money Market Funds: The money market consists of
short-term debt instruments, mostly Treasury bills. This is
a safe place to park your money. You won't get great
returns, but you won't have to worry about losing
your principal. A typical return is twice the amount you
would earn in a regular checking/savings account and a
little less than the average certificate of deposit (CD).
Balanced Funds: The objective of these funds is to
provide a balanced mixture of safety, income and capital
appreciation. The strategy of balanced funds is to invest in
a combination of fixed income and equities. A typical
balanced fund might have a weighting of 60% equity and
40% fixed income. The weighting might also be restricted
to a specified maximum or minimum for each asset class.
A similar type of fund is known as an asset allocation
fund. Objectives are similar to those of a balanced fund,
but these kinds of funds typically do not have to hold a
specified percentage of any asset class. The portfolio
manager is therefore given freedom to switch the ratio of
asset classes as the economy moves through the business
cycle.
Global/International Funds: An international fund or
foreign fund invests only outside your home country.
Global funds invest anywhere around the world, including
your home country. It's tough to classify these funds as
either riskier or safer than domestic investments. They do
tend to be more volatile and have
unique country and/or political risks. But on the flip side,
they can be part of a well-balanced portfolio, actually
reduce risk by increasing diversification. Although the
world's economies are becoming more inter-related, it is
likely that another economy somewhere is outperforming
the economy of your home country.
Specialty Funds: This classification of mutual funds is
more of an all-encompassing category that consists of
funds that have proved to be popular but not necessarily
belong to the categories we have described so far. This
type of mutual fund forgoes broad diversification to
concentrate on a certain segment of the economy. Sector
funds are targeted at specific sectors of the economy such
as financial, technology, health, etc. Sector funds are
extremely volatile. There is a greater possibility of big
gains, but have to accept that sector may tank.
Regional funds make it easier to focus on a specific area of
the world. This may mean focusing on a region or an
individual country. An advantage of these funds is that
they make it easier to buy stock in foreign countries,
which is otherwise difficult and expensive. Just like for
sector funds, you have to accept the high risk of loss,
which occurs if the region goes into a bad recession.
Socially-responsible funds or ethical funds invest only in
companies that meet the criteria of certain guidelines or
beliefs. Most socially responsible funds don't invest in
industries such as tobacco, alcoholic beverages, weapons
or nuclear power. The idea is to get a competitive
performance while still maintaining a healthy conscience.
Index Funds: The last but certainly not the least important
are index funds. This type of mutual fund replicates the
performance of a broad market index. An investor in an
index fund figures that most managers can't beat the
market. An index fund merely replicates the market return
and benefits investors in the form of low fees.
2. OPEN END & CLOSED END MUTUAL
FUNDS
Mutual funds can also be classified according to how they
are bought and sold. There are open- or closed-end funds
and there is load or no-load funds. An open-end mutual
fund is a mutual fund that continuously issues new shares
as needed and buys them back when investors wish to sell.
There is no limit to how many shares an open-end fund
can sell. The buy and sell price is based on the net asset
value of the fund. The majorities of mutual funds on the
market today are open-end funds and are the type we are
concerned with in this tutorial.
The characteristics of a closed-end mutual fund more
closely resemble that of an individual stock. A closed-end
fund is a mutual fund that issues a fixed number of shares
Nalina K.B. and Anusha P. Kottur VSRDIJBMR, Vol. IV (III) March 2014 / 67

which are then traded (bought and sold) on a stock
exchange or over the counter.
3. LITERATURE REVIEW
A few research studies from 2005 to 2012 that have
influenced the preparation of this paper substantially are
discussed in this section.
Dr. R. Madhumathi, et al. (2005), presented a paper about
the characteristics and performance evaluation of selected
mutual funds in India. The study found that public-sector
sponsored private-sector Indian sponsored and private-
sector foreign sponsored mutual funds do not differ
statistically in terms of portfolio characteristics such as net
assets, common stock%, market capitalization, holdings,
Top Ten %. However, there is a statistical difference
between three classes of public-sector sponsored, private-
sector Indian sponsored and private-sector foreign
sponsored mutual funds in terms of average standard
deviation, average variance and average coefficient of
variation. Portfolio risk characteristics measured through
private-sector Indian sponsored mutual funds. Residual
variance is not linearly related to investment performance
in terms of Jensens alpha and portfolio beta, regardless of
the benchmark index used. The general linear model of
analysis of covariance establishes differences in
performance among the three classes of mutual funds in
terms of portfolio diversification.
Miss. Shazia Iqbal Khalid et al. (2008), performance
evaluation of close-ended mutual funds by investment
objectives in Pakistans economy. The measures explain
the relationship between risk & return. The ranking of
these ratios, in different categories, indicate the
performance of the Funds from investment point of view
with the preference of risk. The results also exhibit that in
all measures the ranking of Funds changed due to the
fluctuating environment of market, which is not suitable
for the performance of closed-ended mutual Funds. The
negative results of all measures indicated the unsatisfied
performance of these Funds which means that the Fund
industry is not at a flourishing stage in Pakistan.
According to the Sharpe and Treynor measures, the
performance of Funds with positive ratios is a preferable
performance.
Laurens Swinkels et al. (2009), Performance evaluation of
Polish mutual fund managers. The purpose of this paper is
to empirically assess the investment performance of
mutual fund managers who operate in the Polish market.
Our results indicate that private investors did not lose out
by investing in the old investment funds that were
already listed in Poland since 2000. Given the spectacular
rise of the number of funds and the assets under
management over the past two years, we leave a
comparison between pre- and post-opening of the Polish
mutual fund market for further research.
Himanshu Puri et al. (2009), Performance Evaluation of
Balanced Mutual Fund Schemes In Indian Scenario.
HDFC MF (Growth) is having the maximum return,
maximum Sharpe and maximum Treynors.
Dr S Rajamohan et al. (2009), Performance Evaluation of
Mutual Fund Industry in India. It is established that the
private sector players hold the greater strength in resources
mobilization. On the other hand, in the public sector, UTI
holds a favorable position. But in terms of performance
UTI contributes in a big way. The other public sector
players like SBI, Can Bank, LIC also hold good position
in the industry.
William J. Trainor et al (2010), Performance measurement
of high yield bond mutual funds. To analyze the risk-
adjusted performance of individual mutual funds that
investors use to invest in asset class. High yield bond
funds continue to show performance that investors wishing
to participate in this asset class should concentrate on the
top performing funds with the lowest expense ratios.
Bushra Zulfiqar, et al. (2011), Examining the Performance
of Closed-End Mutual Funds under Different States of
Pakistani Stock Market. This study reveals that overall
Pakistani closed-end mutual funds have underperformed in
different states of stock market for the sample period
1999-2009. It throws a big question on the performance of
these funds managers. The results are worst in case of
recession state of stock market.
Syed Muhammad Amir Shah, et al. (2011), Performance
evaluation of open end and close end mutual funds in
Pakistan. The results through Sharpe measure and Sortino
measure are negative of sample data. It shows risk
adjusted negative return to investors. Treynor measure
results of few funds are better; however, overall result of
Treynor measure is also negative. Market portfolio result
of all measures is positive which shows positive return per
unit of risk.
Muhammad Aamir, et al. (2011), Closed-Ended Mutual
Fund and Stock Market Growth: A Study of KSE
Pakistan. Stock market growth is an important leading
indicator of the economy. If the stock market is indicating
a good trend in the trading activities then it reflects the
positive economic growth. The contribution of all sectors
is necessary for a better growth of the overall market.
The study addressed by Sumninder Kaur Bawa et al.
(2011) reveals about the performance evaluation of
income schemes of mutual funds in India - a public private
comparison. Evaluating the performance of a few selected
income or debt mutual funds schemes of India. He found
that the parameter of risk adjusted Compound Annual
Growth Rate private sector income schemes are
performing well again as compared to their counterparts
public sector sponsored.
Dr. Vikas kumar, et al. (2011), Performance evaluation of
open ended schemes of mutual funds. It is established that
the private sector players hold the greater strength in
resources mobilization. On the other hand, in the public
sector, UTI holds a favorable position. But in terms of
performance UTI contributes in a big.
Sukhwinder kaur dhanda, et al. (2012), Performance
evaluation of selected open ended mutual funds in India.
In 2009-10 except ING core equity fund and Kotak select
Nalina K.B. and Anusha P. Kottur VSRDIJBMR, Vol. IV (III) March 2014 / 68

focus fund all even schemes performed better than BSE-
Sensex. Except one scheme all were able to provide
reward for variability and volatility more than the
benchmark. Four schemes have more risk than sensex. In
the year 2010-11 bench mark has outperformed than all
schemes. All schemes have failed to give more reward for
variability than benchmark. Only four schemes were able
to give reward for volatility than benchmark. So at the end
we can see that HDFC top 200 Fund, HDFC capital
builder fund and UTI opportunity funds were able to fulfill
the expectations of the investors in terms of risk and
return.
4. OBJECTIVES
Evaluating the performance of few selected mutual
fund schemes of India on the basis of their NAV (Net
Asset Value) recorded for a period of three years six
months (April 2009 to September 2012).
5. FUNDS CONSIDERED FOR THE STUDY
Private sector: Edelweiss Absolute Return Fund Growth,
ICICI Prudential Blended Plan B Growth Option and
HDFC Capital Builder Fund - Growth Option.
Public sector: SBI Magnum Multicap Fund Growth
Option, LIC NOMURA MF Floater MIP Growth and
UTI - G-Sec Fund-Growth.
6. RESEARCH METHODOLOGY
In this study three Private sector and three Public sector
mutual funds have been considered. To measure the
comparative performance of these funds S & P CNX
NIFTY Index has taken as benchmark. This study uses
secondary data from April 2009 to September 2012;
NAVs of mutual funds has been taken from the website
of AMFI. Data for benchmark has been taken from the
website of NSE-India. Return, Beta, Standard Deviation,
Sharpe ratio, Treynor ratio, Jenson measure, and CAGR,
M-square has been used to analyze the data.
7. DATA ANALYSIS
The parameters like average return, standard deviation,
Beta, Sharpe ratio, Treynor ratio, Jensons measures, M-
square and CAGR has been calculated separately for all
the schemes from April 2009 to September 2012.
Table 1: Market Return and Standard Deviation
Funds
Edelweiss
Absolute
Return Fund
Growth
SBI Magnum
Multicap Fund
Growth
Option
ICICI
Prudential
Blended Plan B
Growth Option
LIC NOMURA
MF Floater
MIP Growth
UTI - G-
Sec Fund-
Growth

HDFC
Capital
Builder Fund
- Growth
Option
Market
Return
0.89 0.89 0.89 0.89 0.89 0.89
Standard
Deviation
1.76 1.76 1.76 1.76 1.76 1.76
8. S & P CNX NIFTY INDEX
It is a market index is used by funds to benchmark their fund performance. It is a well diversified 50 stock index
accounting for 23 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios,
index based derivatives and index funds. It is owned and managed by India Index Services and Products Ltd. (IISL),
which is a joint venture between NSE and CRISIL. Impact cost of the S&P CNX Nifty for a portfolio it is professionally
maintained.
Table 2: Mean Return
Funds
Edelweiss
Absolute
Return Fund
Growth
SBI Magnum
Multicap Fund
Growth
Option
ICICI Prudential
Blended Plan B
Growth Option
LIC NOMURA
MF Floater MIP
Growth
UTI - G-
Sec Fund-
Growth

HDFC Capital
Builder Fund -
Growth
Option
Mean
returns
0.91 0.89 0.97 0.93 0.98 0.79
Above table shows the return earned by a person if the money stayed invested in a specific scheme from 3rd April 2009
to 3rd September 2012. As per the values mentioned in the above table it can be said that public sector mutual fund UTI
Fund (growth option) gave the maximum return of 0.98% as compared to other schemes considered in the study. Growth
option of HDFC scheme which gave less return 0f 0.79% when compare to others. On the basis of the total return of
mutual funds in the last three years six months it can be accomplished that public sector funds are ahead in giving
composite returns to its investors.
Table 3: Standard Deviation
Funds
Edelweiss
Absolute
Return Fund
SBI Magnum
Multicap Fund
Growth
ICICI
Prudential
Blended Plan B
LIC NOMURA
MF Floater
MIP Growth
UTI - G-
Sec Fund-
Growth
HDFC
Capital
Builder Fund
Nalina K.B. and Anusha P. Kottur VSRDIJBMR, Vol. IV (III) March 2014 / 69

Growth Option Growth Option - Growth
Option
Standard
deviation
0.99 1.58 3.46 1.05 1 1.39
The highest standard deviation is of ICICI Fund at 3.46 which are exceptionally high as compared to all its competitors.
The least value of standard deviation was recorded by Edelweiss at 0.99. Amongst the public sector the minimum
standard deviation is of UTI at 1.0, which is almost equal to the minimum of a private sector is of Edelweiss at 0.99.
Another conclusion which can be derived is that public sector growth schemes are more unpredictable when it comes to
assessing returns.
Table 4: Beta
Funds
Edelweiss
Absolute
Return Fund
Growth
SBI Magnum
Multi-cap Fund
Growth
Option
ICICI Prudential
Blended Plan B
Growth Option
LIC NOMURA
MF Floater MIP
Growth
UTI - G-
Sec Fund-
Growth

HDFC Capital
Builder Fund -
Growth
Option
Beta 0.07 3 0.016 0.084 0.3 4.0
The lowest Beta is of ICICI at 0.016 which has less risk and return compare to all other schemes. HDFC has 4 times
more risk and return to that of market.
Table 5: Sharpes Ratio
Funds
Edelweiss
Absolute
Return Fund
Growth
SBI Magnum
Multicap Fund
Growth
Option
ICICI Prudential
Blended Plan B
Growth Option
LIC NOMURA
MF Floater
MIP Growth
UTI - G-
Sec Fund-
Growth

HDFC
Capital
Builder Fund
- Growth
Option
Sharpes -0.28 0 -5.0 -0.47 -0.30 0.025
Rank III II VI V IV I

Sharpes index is a ratio of returns generated by the fund over and above risk free rate of return and the total risk related
with it. Growth schemes of all the selected mutual funds are giving a low Sharpes ratio is a hint of a poorer risk
accustomed result. The most negative Sharpes ratio amongst all is that of ICICI (growth option) at -5 which mean that
this fund has been the most disabled in case of handling market as well as fund related risk and in case of public sector
UTI Fund is the best. After comparing them all it can be concluded that public sector income schemes are the most risk
adjusted schemes
Table 6: Treynors Ratio
Funds
Edelweiss
Absolute
Return Fund
Growth
SBI Magnum
Multicap Fund
Growth
Option
ICICI
Prudential
Blended Plan B
Growth Option
LIC NOMURA
MF Floater
MIP Growth
UTI - G-
Sec Fund-
Growth

HDFC
Capital
Builder Fund
- Growth
Option
Treynors -0.011 0 -0.045 -0.022 -0.051 0.056
Rank III II V IV VI I
-6
-5
-4
-3
-2
-1
0
1
0 0.5 1 1.5 2 2.5 3 3.5
Private
sector
Public
sector
Nalina K.B. and Anusha P. Kottur VSRDIJBMR, Vol. IV (III) March 2014 / 70


Treynor of the scheme it is the excess return over risk free return per unit of systematic risk i.e. beta. The value indicating
there by that the schemes provided adequate/inadequate returns as against the level of risk involved in the investment.
Analysis of table reveals that HDFC Fund Growth of 0.056. A higher Treynor Index as compared to market indicates that
investor who invested in mutual fund to form well diversified portfolio did receive adequate return per unit of systematic
risk undertaken.
Table 7: Compound Annual Growth Rate (CAGR)
Funds
Edelweiss
Absolute
Return Fund
Growth
SBI Magnum
Multicap
Fund
Growth
Option
ICICI
Prudential
Blended Plan B
Growth Option
LIC NOMURA
MF Floater
MIP Growth
UTI - G-Sec
Fund-
Growth

HDFC
Capital
Builder
Fund -
Growth
Option
CAGR 7.04 6.33 7.39 6.95 5.55 9.34
It is the year-over-year growth rate of a portfolio for a particular period of time. The time period for which Compound
Annual Growth Rate (CAGR) is calculated may have seen highs and lows in the economy i.e. periods of boom and
recession. CAGR isn't the actual return in reality but it's a make-believe number that explains the rate at which an
investment would have grown if it at all grew at a firm rate. CAGR can be taken as a tool to find the smooth out the
returns. This is evened out in the CAGR ratio and an overall effect of the performance of an investment can be found. It
can be clearly seen that in term of CAGR. HDFCs performance is much higher (9.34%) than all other schemes. On the
other hand the worst amongst the lot is UTI public sector fund giving a CAGR of -5.55%.
Table 8: Jensons Measures
Funds
Edelweiss
Absolute
Return Fund
Growth
SBI Magnum
Multicap Fund
Growth
Option
ICICI Prudential
Blended Plan B
Growth Option
LIC NOMURA
MF Floater MIP
Growth
UTI - G-
Sec Fund-
Growth

HDFC Capital
Builder Fund -
Growth
Option
Jenson -6.13 -11.44 -6.42 -6.02 -4.57 20.13
Table shows the Jensons Measures. It is the regression of excess return of the scheme with excess return of the market,
acting as dependent and independent variables respectively. Higher positive value of alpha posted by the scheme
indicates its better performance. The analysis of the table reveals that HDFC Growth option of 20.13% which means
higher Positive value of Jensons measures indicates good market timing ability of fund managers as regard investment in
securities.
Table 9: M-square
Funds
Edelweiss
Absolute
Return Fund
Growth
SBI Magnum
Multicap Fund
Growth
Option
ICICI Prudential
Blended Plan B
Growth Option
LIC NOMURA
MF Floater MIP
Growth
UTI - G-
Sec Fund-
Growth
HDFC Capital
Builder Fund
- Growth
Option
M-
square
-6.167 0.967 3.59 6.02 -11 2.18
Edelweiss return on fund has 6.167% less than market return.
SBI fund has 0.967% more than market return.
ICICI plan has 3.59% more than market return.
-0.06
-0.04
-0.02
0
0.02
0.04
0.06
0.08
0 0.5 1 1.5 2 2.5 3 3.5
Private sector
Public sector
Nalina K.B. and Anusha P. Kottur VSRDIJBMR, Vol. IV (III) March 2014 / 71

LIC has 6.2% more than market return.
UTI fund has 11% less return than market return.
HDFC has 2.18% more return than market return.
Comparing all the above LIC gives more return than other private schemes and UTI gives very less return.
9. CONCLUSION
The present study is an attempt to analyze and compare
the performance of a few selected public sector and private
sector growth schemes on the basis of their NAVs and
returns recorded for the period of three years six months
starting from April 1
st
, 2009 to September 30
th
, 2012. The
evidences have clearly revealed the following:
On the basis of the total return of mutual funds in the
last decade it can be concluded that Public sector
funds are at the forefront in providing composite
returns to its investors.
Higher positive value of beta posted by the scheme
indicates risk and return involved. More than 1
indicates aggressive investors. HDFC has 4 times
more risk and return compare to market and SBI has 3
times more risk and return compare to market. Both
have aggressive investors.
After comparing the Sharpes ratio of all the selected
schemes it can be concluded that private sector
income schemes are the most risk attuned schemes.
Treynor of the scheme it is the excess return over risk
free return per unit of systematic risk i.e. beta. Here
only HDFC scheme recorded positive value indicating
there by that the scheme provided adequate returns as
against the level of risk involved in the investment.
It can be clearly seen in the study that in terms of
CAGR, private sector has given the best results
(9.34% by HDFC fund growth option).
Higher positive value of alpha posted by the scheme
indicates its better performance. The analysis of the
table reveals that HDFC scheme have positive
Jensons Measures.
In M-square measure LIC has 6.2% more than market
return. SBI fund has 0.967% more than market return.
10. REFERENCE
[1] Dr. R. Madhumathi, et al., the characteristics and
performance evaluation of selected mutual funds in India.
Working paper, 2005
[2] Miss. Shazia Iqbal Khalid et al., performance evaluation of
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Pakistans economy. working paper, 2008
[3] Laurens Swinkels et al., Performance evaluation of Polish
mutual fund managers. International Journal of Emerging
Markets, Vol. 4 (1) pp. 26 42, 2009
[4] Himanshu Puri et al. Performance Evaluation of Balanced
Mutual Fund Schemes In Indian Scenario. Delhi Institute
of Advanced Studies, working paper, 2009
[5] Dr S Rajamohan et al. Performance Evaluation of Mutual
Fund Industry in India, working paper, 2009
[6] William J. Trainor et al, "Performance measurement of high
yield bond mutual funds", Management Research Review,
Vol. 33 Iss: 6 pp. 609 616, 2010
[7] Bushra Zulfiqar, et al., Examining the Performance of
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[8] Syed Muhammad Amir Shah, et al., Performance
evaluation of open end and close end mutual funds in
Pakistan, African Journal of Business Management Vol.5
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[9] Muhammad Aamir, et al., Closed-Ended Mutual Fund and
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[10] Kaur Bawa et al. performance evaluation of income
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[11] Dr. Vikas kumar, et al, Performance evaluation of open
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