Abstract
In the contemporary world, many fast mushrooming financial institutions are, offering new products and services to the investors. A proper evaluation measure will get rid of the confusion and help investors to decide the relatively better investment in various mutual fund schemes. In this paper, an attempt has been made to examine the components and sources of investment performance of various schemes of Mutual funds which are floated in the market. The objective of this study is to evaluate the performance of Indian Mutual Fund Schemes through relative performance index (RPI), risk- return analysis, Treynor's ratio. Sharpe's ratio, Jensen's measure, and Fama's measure. The study covers a sample of 320 schemes of 37 Fund houses for the purpose of performance evaluation on Non-probability Convenience Sampling basis which covers in all 14 types of fund classes for the time period of February 2006- January 201. The empirical result reported here reveal the fact that the mutual funds were not able to compensate the investors for the additional risk that they have taken by investing in the mutual funds. The results of performance measures suggest that out sample of 320 schemes only 90 were able to satisfy investor expectations by giving excess returns over expected returns based on both premium for systematic risk and total risk.
Highlights
Mutual Funds is a topic which is of enormous interest to researchers all over the world, and to investors
A mutual fund as a mediumto-long term investment option is preferred as a suitable investment option by investors
The aim behind this study is to evaluate the performance of the various mutual fund schemes from period 2006-2011 which is a combination of bull a n d bear phases of the market
Summary
Mutual Funds is a topic which is of enormous interest to researchers all over the world, and to investors. A mutual fund as a mediumto-long term investment option is preferred as a suitable investment option by investors. The mutual fund industry in India began with setting up of the Unit Trust of India (UTI) in 1964 by the Government of India. In 1987 public sector banks and two Insurance companies (Life Insurance Company and General insurance company) were allowed to launch mutual funds. Securities and Exchange Board of India(SEBI), regulatory body for Indian capital market, formulated comprehensive regulatory framework for Mutual Funds in 1993 and allowed private corporate bodies to launch mutual fund schemes. Since several mutual funds have been set up by the private and joint sectors
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