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Dissertation on
PREPARED BY
Mohammad Majid
BATCH - 2009-2011
Acknowledgement
CERTIFICATE
ABSTRACT
Mutual Funds (MF) have become one of the most attractive ways
for the average person to invest their money. It is said that bank
investment is the first priority of people to invest their savings and
the second place is for investment is held by mutual funds and th
ere afte r other avenues. A Mutual Fund pools resources from
thousands of investors and then diversifies its investment into
many different holdings such as stocks, bonds, or Government
securities in order to provide high relative safety and returns as per
the scheme principles.
Diversification –
Economies of Scale –
Liquidity –
Costs –
Mutual funds don't exist solely to make your life easier - all funds
are in it for a profit. The mutual fund industry is masterful at
burying costs under layers of jargon. These costs are so
complicated that in this tutorial we have devoted an entire section
to the subject.
Dilution –
Taxes –
HYPOTHESIS:
LITERATURE SURVEY
But with the market down about a quarter so far in 2008, investors
have seen the value of their holdings cut by almost a third and have
started cutting back on new investments.
“There has been a slowdown in the flows of equity funds in the last
two months,” Sanjay Prakash, chief executive of the Indian fund
unit of HSBC, told Reuters.
“We are seeing net inflows every day, but very small amounts,”
said Prakash, whose firm saw its average monthly assets drop
0.95% to Rs184.7 billion ($4.3 billion) in the six months ending
May.
Mesmerised by a six-times rise in the stock market in the five years
to the end of 2007, investors saw a 23% drop in the March quarter
as a buying opportunity, pouring in Rs449 billion into the funds,
67% more than a year earlier.
Investors may not be topping up their funds, but they are also not
in a hurry to pull out of them. Outflows of Rs36 billion in May
were lowest since July 2006, AMFI data showed. Outflows from
equity funds in January, when the stock market hit a record high
and before dropping sharply, were more than two times those of
May, but inflows were even higher at a record Rs212.5 billion.
Equity funds are not likely to see any major redemption pressure if
the stock market held above 14,000 as investors would like to wait
for a recovery, HSBC’s Prakash said, adding there might be higher
redemptions if the market dropped below 13,000. Indian shares fell
to a 2008 low of 14,645 on June 10.
In 1976, John C. Bogle opened the first retail index fund called the
First Index Investment Trust. It is now called the Vanguard 500
Index fund. In November of 2000 it became the largest mutual
fund ever with $100 billion in assets.
17
The Unit Trust of India (UTI) was established in the year 1963
by passing an Act in the Parliament.
The UTI was setup by the Reserve Bank of India (RBI) and
functioned under the Regulatory and Administrative control of
the RBI.
State Bank of India Mutual Fund was the first non-UTI Mutual
Fund.
A. Bank Sponsored
2. Others –
-UTI Asset Management Company Ltd
B. Institutions
- LIC Mutual Fund Asset Management Company Limited
C. Private Sector
1. Indian
- Benchmark Asset Management Company Pvt. Ltd.
- DBS Cholamandalam Asset Management Ltd.
- Deutsche Asset Management (India) Pvt. Ltd.
- Edelweiss Asset Management Limited
- Escorts Asset Management Limited
- IDFC Asset Management Company Private Limited
- JM Financial Asset Management Private Limited
- Kotak Mahindra Asset Management Company Limited
(KMAMCL)
- Quantum Asset Management Co. Private Ltd.
22
2. Foreign
- AIG Global Asset Management Company (India) Pvt. Ltd.
- FIL Fund Management Private Limited
- Fortis Investment Management (India) Pvt. Ltd.
- Franklin Templeton Asset Management (India) Private Limited
- Goldman Sachs Asset Management (India) Private Limited
- Mirae Asset Global Investments (India) Pvt. Ltd.
Open-end fund
The term mutual fund is the common name for what is classified as
an open-end investment company by the SEC. Being open-ended
means that, at the end of every day, the fund issues new shares to
investors and buys back shares from investors wishing to leave the
fund.
Exchange-traded funds
Equity funds
Bond funds
Money market funds hold 26% of mutual fund assets in the United
States. Money market funds entail the least risk, as well as lower
rates of return. Unlike certificates of deposit (CDs), money market
shares are liquid and redeemable at any time.
Funds of funds
Hedge funds
Hedge funds in the United States are pooled investment funds with
loose SEC regulation and should not be confused with mutual
funds. Some hedge fund managers are required to register with
SEC as investment advisers under the Investment Advisers Act.
The Act does not require an adviser to follow or avoid any
particular investment strategies, nor does it require or prohibit
specific investments. Hedge funds typically charge a management
fee of 1% or more, plus a "performance fee" of 20% of the hedge
fund's profits. There may be a "lock-up" period, during which an
investor cannot cash in shares. A variation of the hedge strategy is
the 130-30 fund for individual investors.
Equity funds
FUND TYPES
Index Fund
Growth Fund
Value Fund
Sector (Specialized)
Income Fund
Balanced Fund
IMPORTANT TERMINOLOGIES
Capitalization
Risk Factors
Management fees
The management fee for the fund is usually synonymous with the
contractual investment advisory fee charged for the management of
a fund's investments. However, as many fund companies include
administrative fees in the advisory fee component, when
attempting to compare the total management expenses of different
funds, it is helpful to define management fee as equal to the
contractual advisory fee + the contractual administrator fee. This
"levels the playing field" when comparing management fee
components across multiple funds.
Non-management expenses
who oversee the fund are usually paid a fee for their time spent at
meetings), and printing and postage expense (incurred when
printing and delivering shareholder reports).
Brokerage commissions
SEBI grants registration to only those mutual funds that can prove
an efficient and orderly conduct of business. The track record of
sponsors, a minimum experience of five years in the relevant field
of Investment, financial services, integrity in business transactions
and financial soundness are taken into account. The regulations
also prescribe the advertisement code for the marketing schemes of
Mutual Funds, the contents of the trust deed, the investment
management agreement and the scheme-wise balance sheet.
Mutual Funds are required to be formed as trusts and managed by
separately formed as trusts and managed by separately formed
37
The new norms also specify a maximum limit of 25% of NAV for
any scheme for investment in listed group companies as against an
umbrella limit of 25% of NAV of all schemes taken together
earlier. SEBI increased (June 7, 2000) the maximum investment
limit for MFs in listed companies from 5% to 10% of NAV in
respect of open-ended funds. Changes in fundamental attributes of
a scheme was also allowed without the consent of three fourths of
unit holders provided the unit holders are given the exit option at
NAV without any exit load.
Both fixed deposits and mutual funds offer liquidity, but subject
to some differences:
• If the security does not get traded in the market, then the
liquidity remains on paper. In this respect, an open-end scheme
offering continuous sale / re-purchase option is superior.
At the end of 2006 March, Indian mutual fund industry reached Rs.
2, 57, 499 crores. It is estimated that by 2010 March-end, the total
assets of all scheduled commercial banks should be Rs. 40, 90, 000
crores.
Going by the above facts and generally, mutual funds have often
been considered a good route to invest and earn returns with
reasonable safety. Small and big investors have both invested in
instruments that have suited their needs. And so equity and debt
funds have attracted investments alike. The performance of the
investments, equity in particular, for the last one-year, has however
been disappointing for the investors.
This hurts the investor but then investments in equity are never
safe. Mutual funds are not just guilty of mismanaging their risks as
the recent survey by Pricewaterhouse Coopers indicates but also
46
Till now, Investor education has been one of the issues, less cared
for, by the industry. The industry focused upon the amounts and
not why a person wanted to invest or whether a particular product
suited him or not. While educating the customer might not have
been on the cards earlier, the things are beginning to change now.
Till now, investors have been ignorant about the kind of fund to be
picked or how to select a fund. Teaching an investor how to select
a fund is thus an important aspect. Educated investors can, on their
part, ask pertinent questions to find funds that qualify to be in their
portfolio as per their risk bearing capacity.
• The study was limited to just finding the risk and returns
associated with the schemes.
• The study covers the schemes provided by six different
companies.
• The study covers the period of past two years from January 2007
to January 2009.
• The study covers only the open-ended funds.
PRODUCT PROFILE
Plans and Options under the Plan : Dividend and Growth Option.
Entry Load: 2.25% for amount < 5 crores. Nil, for amount > 5
crore.
Plans and Options under the Plan: Growth and Dividend options.
Inception Date: April 20, 1992 Plans and Options under the Plan:
Entry Load: 2.25% for < Rs.2 crores; Nil for >= Rs.2 crores.
INTRODUCTION:
RESEARCH DESIGN:
DESCRIPTIVE RESEARCH
OPERATIONAL DEFINITIONS OF
THE CONCEPT
RISK:
Systematic Risk:
i. Market Risk
ii. Interest Rate Risk
iii. Purchasing Power Risk.
Unsystematic Risk:
i. Business Risk
ii. Financial Risk
Risk Measurement:
i. Standard Deviation:
ii. Beta:
Beta = + 1.0
One percent change in market index returns causes exactly one
percent change in the security return. It indicates that the security
moves in tandem with the market.
Beta = + 0.5
One percent change in the market index return causes 0.5 percent
change in the security return. The security is less volatile compared
to the market.
57
Beta = + 2.0
One percent change in the market index return causes 2 percent
change in the security return. The security return is more volatile.
When there is a decline of 10% in the market return, the security
with beta of 2 would give a negative return of 20%. The security
with more than 1 beta value is considered to be risky.
Negative Beta
Negative beta value indicates that the security return moves in the
opposite direction to the market return. A security with a negative
beta of -1 would provide a return of 10%, if the market return
declines by 10% and vice-versa.
RATE OF RETURN:
The net asset value of the fund is the cumulative market value of
the assets fund of its liabilities. In other words, if the fund is
dissolved or liquidated, by selling off all the assets in the fund, this
is the amount that the shareholders would collectively own. This
gives rise to the concept of net asset value per unit, which is the
value, represented by the ownership of one unit in the fund. It is
calculated simply by dividing the net asset value of the fund by
thenumber of units. However, most people refer loosely to the
58
NAV per unit as NAV, ignoring the “per unit”. We also abide by
the same convention.
METHODOLOGY OF DATA
COLLECTION:
SOURCES OF DATA
• Internet sources.
• Newspapers.
To analyze the data in the project various statistical tools are used.
They are:
i. Beta:
σ = (∑(d^2)/N - (∑d/N)^2)^1/2
d = (X - (∑X/N))
X = B-A+D/B
Where,
A = NAV at the end of the period of the period;
61
EVALUATION OF PORTFOLIO
PERFORMANCE:
Ti = (ARp-ARf)/B
Si=(ARp-ARf)/std dev
Thus, portfolio O did the best, and B failed to beat the market. We
could draw the CML given this information: CML=.08 + (0.30)
ation: (0.30)SD
Measure This measure (as are all the previous measures) is based
on the CAPM: We can express the expectations formula (the above
formula) in terms of realized rates of return by adding an error
term to reflect the difference between E(Rj) vs actual Rj:
Rp – RFR + beta(Rm-RFR)
we get: Using this format, one would not expect an intercept in the
regression. However, if we had superior portfolio managers who
were actively seeking o undervalued out securities, they could earn
a higher risk-adjusted return than those implied in the model. So, if
we examined returns of superior portfolios, they would have a
significant positi intercept. positive An inferior manager would
have a significant negative intercept. A manager that was not
anager clearly superior or inferior woul have a statistically
insignificant intercept. We would test ld the constant, or intercept,
in the following regression:
BIRLA
TIME DEUTSCHE HSBC UTI LIC TATA SUNLIFE
January 11.8178 73.0236 32.86 21.5973 11.339 183.53
February 12.3544 73.9072 33.62 22.5309 11.3209 188.79
March 10.6932 67.5688 31.06 19.6142 10.3624 172.01
April 10.9721 64.9581 29.64 18.4244 10.6306 167.37
May 12.1329 72.6258 33.21 21.0207 10.8756 187.76
June 12.2531 75.3107 34.94 21.2184 10.9052 203.87
July 12.3014 76.9942 34.98 21.5221 11.2891 209.45
August 12.6771 77.9247 35.06 21.9315 11.1341 212.68
September 13.0877 80.017 35.96 22.8593 11.5812 219.63
October 15.1709 89.453 40.16 25.6692 12.4419 242.73
November 16.7393 105.7896 44.57 30.8318 13.3582 269.86
December 17.1336 109.2251 45.11 32.8405 13.8287 283.85
January 17.6996 115.0424 48.33 34.8438 14.5373 308.33
February 15.4311 101.7038 42.13 28.6223 12.5876 254.44
March 14.3606 93.8314 39.98 26.4151 11.9001 234
April 13.8577 87.9695 37.94 22.313 11.0109 211.51
May 14.84 97.1612 41.24 26.21 12.0565 232.89
June 13.3027 91.8995 38.75 22.859 11.4104 215.16
July 11.9187 77.6541 32.34 19.2678 9.6343 172.22
August 13.1324 83.9529 35.32 21.7883 10.4812 188.61
September 12.8837 82.4644 35.87 21.2754 10.3467 189.22
October 11.4472 75.343 33.24 19.3474 9.2684 170.79
November 8.6122 60.6914 27.16 15.0982 7.8354 137.68
December 7.6261 55.5332 24.3 12.8871 7.1906 120.52
January 8.3681 60.5767 26.62 15.1599 7.9427 136.66
69
BSE SENSEX
AVERAGE
MARKET MARKET
RETURNS RETURNS (RM-
TIME INDEX (RM) (ARM) RM-ARM ARM)^2
JANUARY 14,090.92 -0.08 -0.04676 -0.0332 0.0011
FEBRUARY 12,938.09 0.0104 -0.04676 0.0571 0.0033
MARCH 13,072.10 0.0612 -0.04676 0.108 0.0117
APRIL 13,872.37 0.048 -0.04676 0.0948 0.009
MAY 14,544.46 0.0073 -0.04676 0.0541 0.0029
JUNE 14,650.51 0.0615 -0.04676 0.1083 0.0117
JULY 15,550.99 -0.0149 -0.04676 0.0319 0.001
AUGUST 15,318.60 0.1288 -0.04676 0.1755 0.0308
SEPTEMBER 17291.1 0.1473 -0.04676 0.1941 0.0377
OCTOBER 19837.99 -0.0239 -0.04676 0.0228 0.0005
NOVEMBER 19363.19 0.0477 -0.04676 0.0945 0.0089
DECEMBER 20286.99 -0.13 -0.04676 -0.0833 0.0069
JANUARY 17648.71 -0.004 -0.04676 0.0428 0.0018
FEBRUARY 17578.72 -0.11 -0.04676 -0.0633 0.004
MARCH 15644.44 0.105 -0.04676 0.1518 0.023
APRIL 17287.31 -0.0504 -0.04676 -0.0036 0
MAY 16,415.57 0.01799 -0.04676 0.0288 0.0008
JUNE 13,461.60 0.0664 -0.04676 0.1132 0.0128
JULY 14,355.75 0.0145 -0.04676 0.0613 0.0038
AUGUST 14,564.53 -0.117 -0.04676 -0.0702 0.0049
SEPTEMBER 12,860.43 -0.2389 -0.04676 -0.1921 0.0369
OCTOBER 9,788.06 -0.071 -0.04676 -0.0243 0.0006
NOVEMBER 9,092.72 0.061 -0.04676 0.1078 0.0116
DECEMBER 9,647.31 -0.0231 -0.04676 0.0237 0.0006
JANUARY 9,424.24 -1 -0.04676 -0.9532 0.9087
SUM(RM-
ARM)^2 1.135
70
SUM RF 101.75
ARF 0.0424
71
4.3
4.2
4.1
4
RETURN
3.9 Series1
3.8
3.7
3.6
3.5
Y
Y
Y
P T UL Y
CH
P T U LY
CH
R
AY
R
JA ER
JA ER
AY
AR
AR
AR
BE
BE
AR
AR
B
B
M
M
J
J
NU
NU
NU
EM
EM
M
M
M
VE
VE
JA
NO
NO
SE
SE
TIME
ABBREVITIONS
RM MARKET RETURNS
RP ASSET RETURN
DEUTSCHE
(RP-
RP- RM- ARP)*(RM- (RP-
TIME NAV RP ARP ARP ARM ARM) ARP)^2
-
JANUARY 11.8178 0.045406 -0.051 0.0964 0.03324 -0.0032 0.0093
FEBRUARY 12.3544 -0.13446 -0.051 -0.0835 0.0571 -0.0048 0.007
MARCH 10.6932 0.026082 -0.051 0.0771 0.108 0.0083 0.0059
APRIL 10.9721 0.105796 -0.051 0.1568 0.0948 0.0149 0.0246
MAY 12.1329 0.009907 -0.051 0.0609 0.0541 0.0033 0.0037
JUNE 12.2531 0.003942 -0.051 0.0549 0.1083 0.0059 0.003
JULY 12.3014 0.030541 -0.051 0.0815 0.0319 0.0026 0.0066
AUGUST 12.6771 0.032389 -0.051 0.0834 0.1755 0.0146 0.007
SEPTEMBER 13.0877 0.159172 -0.051 0.2102 0.1941 0.0408 0.0442
OCTOBER 15.1709 0.103382 -0.051 0.1544 0.0228 0.0035 0.0238
NOVEMBER 16.7393 0.023555 -0.051 0.0746 0.0945 0.007 0.0056
DECEMBER 17.1336 0.033035 -0.051 0.084 -0.0833 -0.007 0.0071
JANUARY 17.6996 -0.12817 -0.051 -0.0772 0.0428 -0.0033 0.006
FEBRUARY 15.4311 -0.06937 -0.051 -0.0184 -0.0633 0.0012 0.0003
MARCH 14.3606 -0.03502 -0.051 0.016 0.1518 0.0024 0.0003
APRIL 13.8577 0.070885 -0.051 0.1219 -0.0036 -0.0004 0.0149
MAY 14.84 -0.10359 -0.051 -0.0526 0.0288 -0.0015 0.0028
JUNE 13.3027 -0.10404 -0.051 -0.053 0.1132 -0.006 0.0028
JULY 11.9187 0.101832 -0.051 0.1528 0.0613 0.0094 0.0234
AUGUST 13.1324 -0.01894 -0.051 0.0321 -0.0702 -0.0023 0.001
SEPTEMBER 12.8837 -0.1115 -0.051 -0.0605 -0.1921 0.0116 0.0037
OCTOBER 11.4472 -0.24766 -0.051 -0.1967 -0.0243 0.0048 0.0387
NOVEMBER 8.6122 -0.1145 -0.051 -0.0635 0.1078 -0.0068 0.004
DECEMBER 7.6261 0.097297 -0.051 0.1483 0.0237 0.0035 0.022
JANUARY 8.3681 -1 -0.051 -0.949 -0.9532 0.9046 0.9006
Sum 1.0032 1.1681
73
Arp = -0.0510
(Rm – Arm)^2 = 1.1351
B = 0.8838
Std Dev = 0.2206
Arm = -0.0468
ARf = 0.0424
SML = -0.0364
Measures:
Treynor -0.1057
Sharpe -0.4234
Jensen -0.0146
74
HSBC
(RP-
RP- RM- ARP)*(RM- (RP-
TIME NAV RP ARP ARP ARM ARM) ARP)^2
JANUARY 73.0236 0.0121 -0.0451 0.05718 -0.0332 -0.0019 0.0033
FEBRUARY 73.9072 -0.08576 -0.0451 -0.04068 0.0571 -0.00232 0.0017
MARCH 67.5688 -0.03864 -0.0451 0.00644 0.108 0.000696 0
APRIL 64.9581 0.118041 -0.0451 0.16312 0.0948 0.015457 0.0266
MAY 72.6258 0.036969 -0.0451 0.08205 0.0541 0.004436 0.0067
JUNE 75.3107 0.022354 -0.0451 0.06743 0.1083 0.0073 0.0045
JULY 76.9942 0.012085 -0.0451 0.05717 0.0319 0.001821 0.0033
AUGUST 77.9247 0.02685 -0.0451 0.07193 0.1755 0.012625 0.0052
SEPTEMBER 80.017 0.117925 -0.0451 0.16301 0.1941 0.031632 0.0266
OCTOBER 89.453 0.182628 -0.0451 0.22771 0.0228 0.005198 0.0519
NOVEMBER 105.79 0.032475 -0.0451 0.07756 0.0945 0.007327 0.006
DECEMBER 109.225 0.05326 -0.0451 0.09834 -0.0833 -0.00819 0.0097
JANUARY 115.042 -0.11595 -0.0451 -0.07087 0.0428 -0.00303 0.005
FEBRUARY 101.704 -0.07741 -0.0451 -0.03233 -0.0633 0.002045 0.001
MARCH 93.8314 -0.06247 -0.0451 -0.01739 0.1518 -0.00264 0.0003
APRIL 87.9695 0.104487 -0.0451 0.14957 -0.00364 -0.00054 0.0224
MAY 97.1612 -0.05415 -0.0451 -0.00907 0.02877 -0.00026 0.0001
JUNE 91.8995 -0.15501 -0.0451 -0.10993 0.11316 -0.01244 0.0121
JULY 77.6541 0.081114 -0.0451 0.12619 0.06126 0.007731 0.0159
AUGUST 83.9529 -0.01773 -0.0451 0.02735 -0.0702 -0.00192 0.0007
SEPTEMBER 82.4644 -0.08636 -0.0451 -0.04128 -0.1921 0.007931 0.0017
OCTOBER 75.343 -0.19447 -0.0451 -0.14939 -0.0243 0.003627 0.0223
NOVEMBER 60.6914 -0.08499 -0.0451 -0.03991 0.1078 -0.0043 0.0016
DECEMBER 55.5332 0.09082 -0.0451 0.1359 0.02366 0.003215 0.0185
JANUARY 60.5767 -1 -0.0451 -0.95492 -0.9532 0.910268 0.9119
Sum 0.983755 1.1589
75
Arp -0.0451
(Rm – Arm)^2 1.1351
B 0.8667
Std Dev 0.2197
Arm -0.0468
ARf 0.0424
SML -0.0349
Measures:
Treynor -0.1009
Sharpe -0.3981
Jensen -0.0102
76
UTI
(RP-
RM- ARP)*(RM-
TIME NAV RP ARP RP-ARP ARM ARM) (RP-ARP)^2
Arp -0.04644
(Rm – Arm)^2 1.1351
B 0.8527
Std Dev 0.2175
Arm -0.0468
ARf 0.0424
SML -0.0336
Measures:
Treynor -0.1042
Sharpe -0.4084
Jensen -0.0128
78
LIC
(RP-
ARP)*(RM- (RP-
TIME NAV RP ARP RP-ARP RM-ARM ARM) ARP)^2
Arp -0.0464
(Rm – Arm)^2 1.1351
B 0.8527
Std Dev 0.2175
Arm -0.0468
ARf 0.0424
SML -0.0336
Measures:
Treynor -0.1042
Sharpe -0.4084
Jensen -0.0128
80
TATA
(RP-
RM- ARP)*(RM- (RP-
TIME NAV RP ARP RP-ARP ARM ARM) ARP)^2
Arp -0.05324
(Rm – Arm)^2 1.1351
B 0.8527
Std Dev 0.2175
Arm -0.0468
ARf 0.0424
SML -0.0336
Measures:
Treynor -0.1042
Sharpe -0.4084
Jensen -0.0128
82
BIRLA SUNLIFE
(RP-
ARP)*(RM- (RP-
TIME NAV RP ARP RP-ARP RM-ARM ARM) ARP)^2
Arp -0.04827
(Rm – Arm)^2 1.1351
B 0.8527
Std Dev 0.2175
Arm -0.0468
ARf 0.0424
SML -0.0336
Measures:
Treynor -0.1042
Sharpe -0.4084
Jensen -0.0145
84
Source of
Variation SS df MS F P-value F crit
Between
groups 0.001022 5 0.000204 0.004164 0.999997 2.277044
within
group 7.065738 144 0.049068
LOS 5%
F-tab 2.62
87
FINDINGS
When the Sharpe measure was used the mutual funds can be
ranked in the order: LIC, HSBC, Birlasun Life, UTI, StanChart and
Tata mutual funds as per the decreasing values of the measure.
From carrying out the ANOVA test on the returns of the mutual
funds, we see that the F calculated value is less than the tabulated
value, we hence conclusively accept the null hypothesis i.e. There
is no significant difference in the returns of the mutual fund
companies analysed.
88
CONCLUSION
From the market indices it is very clear that the markets have been
falling over the two years from which the data has been taken. As a
result, equity mutual funds that are dependent on the market have
also witnessed falling returns. From the analysis it is very clear that
the measures used to evaluate the equity mutual funds i.e. Treynor,
Jenson and Sharpe have all got negative values. The negative
values of these funds suggests that the investor stands to lose
money as long as the markets keep falling. The farther the measure
is from zero, the more they lose money. Since the measures used
here use different parameters for valuation, the ranks assigned by
each measure are different from each other.
From our analysis using Treynor Measure, we see that all the
values are negative and that HSBC Mutual Fund has the highest
value. Hence, this fund stands to lose the least as long as the
prevailing market conditions exist.
In our analysis using Sharpe’s Measure, LIC mutual Fund has the
highest value among samples used and hence stands to lose the
least amount of money.
It is very clear from the ANOVA test that has been carried out, We
have been able to accept the NULL Hypothesis, that there is no
significant difference between the returns of the different mutual
funds that have been analysed. Hence investing in equity mutual
funds at a time when the markets are falling is not the best
available option and also the difference in returns is minimal. Even
though mutual funds tend to hedge risks of the investor but an
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entirely equity based fund does not perform any better than the
Sensex itself in a drastically falling market. None of the Mutual
Fund House were able to perform contrary to to the falling BSE
SENSEX index, hence providing no hedging of risk as such.
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BIBLIOGRAPHY
BOOKS REFERRED
JOURNALS
• Outlook Money.
• Business World.
WEB SITES
• www.sebi.gov.in
• www.mutualfundsindia.com
• www.amfi.com
• www.nseindia.com
• www.value-research.com