Performance Evaluation of Indian Equity Mutual Funds against Established Benchmarks Index

Abstract

In this paper, an attempt has been made to analyses the performance of equity mutual funds industry against risk free rate and benchmarks return over the five years. The samples consists 10 growths oriented-open ended-equity mutual fund schemes belong to 5 public and 2 private mutual fund companies. Results are tested through risk-return analysis, Coefficient of Variation, Treynor's ratio, Sharp's ratio, Jensen's measure, Fama's measure and Regression analysis. The data used is monthly closing NAVs and benchmark market index closing for the study period of April 2007 to March 2012. The risk return analysisrevealed that out of 10 schemes 3 have underperform the market, 7 are found to havelower total risk than the market and all the schemes have given returns higher than risk free rates. The Treynor ratio of all the mutual funds scheme are over perform the benchmark market index and Sharpe ratio of 3 mutual funds scheme underperform the benchmark market index. The result of regression analysis suggests that benchmark market return index has statistically significant impact on mutual fund return at 5% level of significance.

Untitled

“…Research on India equity funds performance by Ashraf and Sharma (2014) shows that mean of equity funds return is higher than the average market return. Goyal (2015), Choudary and Chawla (2016) also found results that the mean of mutual funds return was higher than benchmark returns.…”

“…Research on the performance of mutual funds has been carried out in several countries. Research conducted by Ashraf and Sharma (2014) on the performance of mutual funds in India shows that most mutual funds outperform market benchmarks. This research was supported by Panda and Moharana (2014), Goyal (2015), Choudary and Chawla (2016), Agarwal and Mirza (2017), Yalavatti and Bheemanagouda (2017).…”

Optimizing Fund Performance: A Communication Systems Approach to Data Mining in Large- Cap Equity Mutual Funds

“…Performance of funds in same category varies widely and is dependent on many factors like fund manager expertise, churn ratio, diversification, expense ratio etc. The baseline for fund manager is to beat the Index returns and create additional returns for the investors (Ashraf et al 2014). Some key metrics like risk, volatility, resilience, alpha etc need to be studied in tandem with returns so that a comprehensive performance can be evaluated for a particular fund which can be compared with similar funds in same or different category ( Muruthy et al 2022).…”

Perbandingan Kinerja Pasar Modal Syariah Dan Konvensional : Suatu Kajian Empiris Pada Pasar Modal Indonesia

“…Menurut Otoritas Jasa Keuangan (OJK), nilai kapitalisasi pasar saham JII tahun per 21 April 2017 meningkat 9,25 persen dibandingkan akhir tahun 2016 menjadi Rp. 4…”