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MUTUAL FUND
ACTIVE MANAGEMENT
Active management means holding the
PASSIVE MANAGEMENT
It is a process of holding a well diversified
portfolio for long term with the buy and hold
REVIEWS
Shankar
2007
Active Versus Passive Index Management: A Performance Comparison of the S&P and the Russell Indexes
Rampotis
2009
Active vs. Passive Management: New Evidence from Exchange Traded Funds
Fallon
2009
Active Management vs. Passive Management in the Colombian Private Pension Open Mutual Fund Industry
OBJECTIVES
To know the return provided by growth and index schemes. To know the risks of growth and index schemes. To know the excess return provided by growth and index schemes.
RESEACH METHODOLOGY
Research type Descriptive and Conclusion Oriented Data Collection sources secondary Tools of Data Analysis SHARPE MODEL TREYNOR MODEL JENSON MODEL
SHARPE MODEL
In this model, performance of a fund is evaluated
on the basis of ratio of return generated by the fund over and above risk free rate of return. It takes into consideration the total risk associated with the fund.
TREYNORS MODEL
In this model, performance of a fund is evaluated
on the basis of ratio of returns generated by the fund over and above risk free rate of return during a given period. It takes into consideration the systematic risk associated with the fund.
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JENSONS MODEL
This measure involves evaluation of the fund on
the basis of return generated vs. the returns actually expected out of the fund at the given level of its systematic risk. The surplus between the two returns is used to measure the performance of a fund which is compared with the actual returns over the period.
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GROWTH FUNDS
Parameters Templeton India Annualised Return Sharpes Ratio 2.49 1.85 3.77 0.25 1.69 20.6 Reliance India 16.1 26.5 9.1 16.4 HDFC Sahara LIC
Treynor's Ratio
Jensons Ratio
11.55
8.1
16.97
0.97
8.23
16.56
21.74
16.1
28.17
9.24
INDEX FUNDS
Parameters Tata Birla Sun life Annualised Return Sharpes Ratio Treynor's Ratio Jensons Ratio 1.40 9.55 15.56 2.36 9.67 16.18 1.82 10.10 16.55 1.59 10.33 16.18 1.10 7.89 13.70 16.5 16.9 SBI Magnum 17.3 17.2 Franklin UTI Master 14.71
RECOMMENDATION
Keeping in mind the Indian investors who are basically risk averse it is safer for them to invest in growth funds as the return generated by growth funds is much
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QUERIES
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