Abstract
Mutual funds are collective savings and investment vehicles where savings of investors are pooled together to invest for their mutual benefit and returns distributed proportionately. The objective sought to he achieved by Mutual Fund is to provide an opportunity for lower income groups to acquire good return without much difficulty. They cater mainly to the. needs of the individual investor in a manner that provides a regular income, growth, safety, liquidity and diversification opportunities. So, there is a need for the mutual fund investors to evaluate the performance of schemes before deciding on investments. Past performance is taken as reference by many investors. The present paper investigates the performance of 9 funds from three different companies for the period from April 2007 to March 2012 (five years). Yearly NAV of different schemes have been used to calculate the returns from the fund schemes. NSE-Nifty has been used for market portfolio. The historical performance of the selected schemes were evaluated on the basis ofSharpe, Treynor, and Jensen's measure whose results will be useful for investors for taking better investment decisions. The results of various statistical measures are tabulated and consolidated to get a comprehensive picture of the performance of the selected schemes.
Highlights
There are a lot of investment avenues available today in the financial market for the investor. He can invest in Bank Deposits, Corporate Debentures, and Bonds where there is low risk but low return
A mutual fund is a common pool of money into which investors place their contributions that are to be invested in accordance with a stated objective
Studies by Treynor and Mazuy (1966), Jensen (1968), Kon and Jen (1979), Henriksson and Merton (1981), Chang and Lewellen (1984), Henriksson (1984) and Jagannathan and Korajczyk (1986) have generally concluded that mutual fund managers cannot consistently time the market or select under-priced securities. This has led to the conclusion that long-term individual mutual fund performance can best be described as random
Summary
There are a lot of investment avenues available today in the financial market for the investor He can invest in Bank Deposits, Corporate Debentures, and Bonds where there is low risk but low return. People began opting for portfolio managers with expertise in stock markets who would invest on their behalf we had wealth management services provided by many institutions. They proved too costly for a small investor. The risk reduction is one of the most important benefits of a collective investment vehicle like the mutual fund. Mutual fund management companies offer many investor services that a direct market investor cannot get. You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme, the proportion invested in each class of assets and the fiind manager's investment strategy and outlook
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