Performance Evaluation of Systematic Investment Plans in Top Rated

Conservative Hybrid Mutual Funds during 2016-18

Lubina P A
4th Semester B. Com.
Maharaja’s College, Ernakulam, Kerala – 682011
Dr. Vineeth. K. M.
Assistant Professor of Commerce
Maharaja’s College, Ernakulam, Kerala – 682011

Abstract
In the present scenario, where people are more interested in investing in mutual funds
especially using SIPs, it becomes necessary to evaluate the performance of SIP in mid-cap
funds and small-cap funds. It is also relevant to verify the difference, if any in the returns
from the top rated mid-cap funds and small-cap funds through SIPs. It could also be
witnessed that difference between grouped averages of mid cap and small cap funds are not
statistically significant. But the difference in absolute terms is visible.
Key words: Mutual Funds, Systematic Investment Plans, Portfolio Performance

INTRODUCTION
Multiple investment avenues are available today in the financial market for an investor. He
can invest in bank deposits, corporate debentures, and bonds where there is low risk but low
return. He may invest in stock of companies where the risk is high and the returns are also
proportionately high. Many investors do not have the knowledge, time or resources to build
their own portfolio of stocks and bonds. Then there comes an option of mutual funds,
although the investors may have little or no knowledge of investing concepts and strategies.
Mutual funds are trusts, which accepts savings from investors and invest the same in
diversified financial instruments. Mutual funds are also done via Systematic Investment Plan
(SIP), wherein a fixed sum is invested in funds at regular intervals. It is commonly done by
Dollar Cost Averaging (DCA). It is an investment strategy with the goal of reducing the
impact of volatility on large purchases of financial assets such as equities.
STATEMENT OF THE PROBLEM
In the present scenario, where people are more interested in investing in mutual funds
especially using SIPs, it becomes necessary to evaluate the performance of SIP in different
funds. It is also relevant to verify the difference, if any in the returns from the top rated
conservative hybrid funds through SIPs.

OBJECTIVES
 To study the performance of SIP investments in top rated conservative hybrid funds.
 To compare the performance of SIP investments in top rated conservative hybrid
funds.

METHODOLOGY
The study is empirical in nature. Data are collected from secondary sources through websites
like www.moneycontrol.com and www.amfiindia.com.

Scope and Sample Selection

The analysis is limited to the 2 year SIP performance of selected funds from April 2016 to
March 2018.
CRISIL 5 and 4 star rated funs top listed by moneycontrol.com are selected to form the
sample from the two categories under the study:
5 schemes in Conservative Hybrid Funds, viz.
BNP Paribas Conser. Hybrid - D (G)
Axis Regular Saver Fund - Direct (G)
UTI Regular Savings Fund - D (G)
UTI Regular Savings Fund (G)
Axis Regular Saver Fund (G)

Tools of Analysis
An SIP of Rs 1000 at the beginning of each month is assumed to form the basis of
calculations. The schemes are compared using absolute reruns and CAGR. ANOVA is used
to check the difference, if any, in the CAGR of top rated funds within the category.
RESULTS
The collected data was analysed using MS Excel and the following results could be obtained:
Table 1
NAVs and Performance of SIP in Top Rated Conservative Hybrid Funds
Axis UTI
BNP Paribas UTI Axis
Regular Regular
Conser. Regular Regular
Date Saver Savings
Hybrid – Savings Saver
Fund - Fund -
Direct (G) Fund (G) Fund (G)
Direct (G) Direct (G)
Apr-16 23.5945 16.6061 32.9923 32.3512 15.8882
May-16 23.8872 16.7429 33.3154 32.6452 15.9992
Jun-16 24.0917 16.9723 33.7827 33.0854 16.1973
Jul-16 24.4725 17.1165 34.2724 33.5479 16.3143
Aug-16 25.2347 17.5600 35.1999 34.4377 16.7153
Sep-16 25.5399 17.6612 35.5999 34.8089 16.7902
Oct-16 25.9189 17.8785 35.9544 35.1346 16.9767
Nov-16 26.0100 17.9004 35.9719 35.1326 16.9799
Dec-16 26.2903 17.5379 36.1782 35.3153 16.6178
Jan-17 25.9145 16.5300 34.8529 34.8529 16.5300
Feb-17 26.4503 16.8119 35.6126 35.6126 16.8119
Mar-17 26.2317 16.8751 35.6799 35.6799 16.8751
Apr-17 26.8060 17.1873 36.3762 36.3762 17.1873
May-17 27.0812 17.3587 36.5604 36.5604 17.3587
Jun-17 27.4068 17.4605 36.8113 36.8113 17.4605
Jul-17 27.7229 17.6162 38.3696 37.2847 17.6162
Aug-17 28.2026 17.9688 39.2352 38.1061 17.9688
Sep-17 28.3587 18.0345 39.427 38.2703 18.0345
Oct-17 28.4243 18.0320 39.5957 38.4111 18.0320
Nov-17 28.9320 18.3322 39.8866 38.6724 18.3322
Dec-17 28.8901 18.2213 40.0033 38.7624 18.2213
Jan-18 29.1414 18.4729 39.0477 39.0477 18.4729
Feb-18 29.1731 18.5563 39.0769 39.0769 18.5563
Mar-18 28.9543 18.4022 38.7424 38.7424 18.4022
Closing NAV 28.9662 18.4516 39.1794 39.1794 18.4516
Average NAV 26.7804 17.5765 36.7727 36.1969 17.2641
Average cost of
26.6672 17.5555 36.6460 36.0747 17.2259
purchase
Value of Investment 26069 25225 25659 26065 25707
Investment 24000 24000 24000 24000 24000
Absolute Return (Rs) 2069 1225 1659 2065 1707
Absolute Return (%) 8.62 5.10 6.91 8.61 7.12
CAGR (%) 8.16 4.86 6.56 8.14 6.75
(Source: Computed from data collected from secondary sources)
Average returns don’t appeal to be lucrative as it was below 10% in general. The funds under
BNP provided superior returns as compared to Axis and UTI. The difference in returns is
compared for significance using ANOVA.
Table 4 - ANOVA Summary
Groups Count Sum Average Variance
BNP Paribas 1 8.16 8.16
UTI 2 14.7 7.35 1.2482
AXIS 2 11.61 5.805 1.7861

Table 4 A – ANOVA
Source of Variation SS df MS F P-value F crit
Between Groups 4.39047 2 2.195235 1.44697 0.4087 19
Within Groups 3.03425 2 1.517125
Total 7.42472 4
(Source: Computed from CAGR)
**Highly Significant
ANOVA shows that the difference in performance is not significant. It could be inferred that
Top Rated Conservative Funds from different fund houses provide similar returns.

DISCUSSION
Mutual fund investments are more popular in SIP mode among salaried investors. The
relative performance of different funds with varied portfolios always attracts research
interest. In this paper, it could be found that, conservative funds could not generate a
commendable return. There is superior performance in BNP. It could also be witnessed that
difference between grouped averages of fund houses are not statistically significant. The
difference in absolute terms is also minute.

DISCLAIMER
Mutual funds investments are subject to market risk. Past performance is not a guarantee of
future returns. Investors are at their own risk with respect to investment decisions. The
authors are not responsible for the investments made based on this analysis.

REFERENCES
www.amfiindia.com
www.moneycontrol.com
https://freefincal.com