Performance Evaluation of Selected Mutual Funds 1

“PERFORMANCE EVALUTION OF SELECTED MUTUAL FUNDS”
EXECUTIVE SUMMARY
The study tries to analyze performance of various Mutual Fund and compare it the
respective bench mark index in the market and ranks them in a systematic order over a
period of time (3years ) and the advantages available to the investors through mutual
fund. Open –ended funds have been considered. All the information was freely
available. Five different equity funds have taken into consideration and NAV returns for
a period of up to 3 years were compared with their respective Benchmark Index of BSE
200.
The first introduction of a mutual fund in India occurred in 1963, when the Government
of India launched unit Trust of India (UTI). Unit 1987, UTI enjoyed a monopoly in the
Indian mutual fund market. Then a host of other government –controlled Indian canara
Bank, and Punjab National Bank. This market was made open to private players in 1993,
as a result of the historic constitution bought forward by the then congress-led
government under the existing regime of Liberalization, Privatization and globalization
(LPG) and mutual funds play a very important role on Indian economy. Different kinds of
mutual fund companies will help to increase the Indian economy. By this funds the
country having a so many advantage.
Investment goals vary from person to person. Some people want security of investment,
others consider returns by willing to take more risk. But an individual often finds it
difficult to keep track of ownership of this asset, investment, brokerage dues and bank
transaction. Thus, an investor has a choice as to invest on his own in multiple option or
opt for mutual fund for a sole reason that they have benefit in the package. These
include diversification of portfolio, expertise in professional management, liquidity of
investments, tax shield and reduced cost as well as risk. A Mutual Funds collectively
manage almost as much as or more money as compare to banks.
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CHAPTER -1
INTRODUCTION
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INTRODUCTION
Introduction of the study

Mutual Funds are investment products that operate on the principles of ‘strength
numbers’. They collect money from a large group of investors, pool it together, and
invest it in various securities in line with their objectives. They are an alternative to
investing directly. A more convenient alternatives yet no less rewarding. Take stocks,
trading into the market by yourself would mean knowing at the very least, how to
analyze and track companies, the way of the market and the intermediaries who will
help you buy and sell shares. A mutual fund that invest for individual’s handicapped by a
lack of investing acumen or time, or generally disciplined to take charge of their
personal finance.
Mutual Fund are not magic investment vehicles that do it all you’ll have to come to
terms with the fact that they assure neither returns nor the value of yours original
investment. You’ll have to accept the reality that even they, who are supposedly experts
in investment matter, can go wrong. These are inherent risks. But these can be
managed. Mutual Funds offer several advantages that are inherent risks, but these can
be managed. Mutual Fund offer several advantages that make them a powerful and
convenient wealth creation vehicle worthy of yours consideration.
According to the securities and Exchange Board of India (Mutual Fund) Regulation, 1993
defines a mutual fund “a fund established in the form of a trust by a sponsor, to raise
monies by the trustees through the sale of units to the, public, under one or more
schemes, for investing in securities in accordance with these regulation” According to
Weston J. Fred and Brigham, Eugene, F, units trusts are “corporations which accepts
dollar from savers and then use these dollars to buy stock, long term bonds, short term
debt instruments issued by business or government units: these corporation pool funds
and thus reduce risk diversification”.
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Background of the study

Mutual Fund industry today, with about 43 olayers and more than seven hundred
schemes, is one of the most preferred investment avenues in India. However, with an
excess of schemes to choose from, the retail investor faces problems in selecting funds.
Factors such as investment strategy and management style are qualitative, but the
funds record is an important indicator too. Though past performance alone cannot be
indicative of future performance, it is, frankly, the only quantitative way to judge how
good a fund is at present. Therefore, there is a need to correctly assess the past
performance of the performance of a mutual fund scheme, it is should also include the
risk taken by the fund manager because different funds will have different levels of risk
attached to them.
Risk associated with a fund, in a general, can be defined as variability or fluctuations in

the returns generated by it. The higher the fluctuation in the returns of a fund during a
given period, higher will be the risk associated with it. These fluctuation in the returns
generated by a fund are resultant of two guiding forces. First, general market
fluctuations, which affect all the securities present in the market, called market risk or
systematic risk and second, fluctuations due to specific securities present in the
portfolio of the fund, called unsystematic risk. The total risk of a given fund is sum of
these two and is measured in terms of standard deviation of return of the fund.
Systematic risk, on the other hand, is measured in terms of Beta, which represents
fluctuation in the NAV of the fund visa-versa market. The most responsive the NAV of a
mutual fund is to the changes in the market; higher will be its beta. Beta is calculated by
relating the returns on a mutual fund with the returns in the market. While
unsystematic risk can be diversified through investment in a mutual of investments,
systematic risk cannot. By using the risk return relationship, we can try to assess the
competitive strength of the mutual funds visa- versa like one another in a best way.
In the order to determine the risk-adjustment return of investment portfolio, there is

most important and mainly used measures of performance are – The Treynor’s
Measure, the Sharpe’s measure, and the Jenson’s Measure.
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Rational for the study

The study would help the genuine investors to better understand the selected equity
mutual fund performance as against the benchmark. It would also help to understand
and compare the performance of each company’s with that last year.
Statement of the problem

Mutual Fund industry with more than one thousand schemes is one of the most
preferred investment avenues in India. However, with a plenty of schemes to choose
from, the retail investors faces problems in selecting funds. Factors such as investment
strategy and management style are qualitative, but the funds record is an important
indicator too.
Though past performance alone cannot be indicative of future performance, it is frankly,

the only quantitative way to judge how good a fund is at present. Therefore, there is a
need to correctly assess the past performance of different Mutual Funds.
It is very difficult condition in the financial market to find out the area for the
investment. In this, small investors always find securities which yield good return and
less risk. Hence the mutual fund is a security which yield more return when portfolio
managers implement their skills and abilities. The problem for the portfolio managers is
to find out which mutual fund performed better through taking past data pf funds and
using different techniques to analysis.
Objectives the study

1. To do risk-return analysis of the selected equity funds.
2. To evaluate the performance of selected equity by using Sharpe’s and Treynor’s and
Jensen’s models.
3. To compare and rank from selected equity funds, to suggest the investors for future
investment.
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Scope of the study
1. The scope of the project is mainly concentrated on Five different mutual fund
companies’ equity and equity related mutual fund schemes.
2. The study include equity related information pool.
3. The application will provide users with comprehensive information about various
Mutual Fund schemes in the market.
4. Beneficiaries Managements Students
5. The project will help the management student to know about mutual fund, and about
Indian mutual fund industry.
6. Investors to selected the best mutual fund among the selected mutual fund for the
analysis.
7. This project will help several student and corporate client by providing them with
analytical report and comparative statement about equity and equity linked mutual
fund schemes with other top companies’ scheme.
Limitation of the study

The study has certain limitation.
1. The study is conducted using only secondary data.
2. Risk and return of funds are considered as only createria for performance evaluation.
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History of the mutual fund

An open-end fund is one that is available for subscription all through the year. These do
not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset
Value (“NAV”) related prices. The key features of open-end schemes is liquidity.
The mutual fund industry in India started in 1963 with the formation of Unit Trust of
India, at the initiative of the Government of India and Reserve Bank. The history of
mutual funds in India can be broadly divided into distinct phases.
First Phase-1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of parliament. It was set up
by the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial
Development Bank of India (IDBI) took over the regulatory and administrative control in
place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of
1988 UTI had Rs.6,700 crores of asset under management.
Second Phase-1987-1993(Entry of Public Sector Funds)

In 1987 market the entry of non- UTI, public sector mutual funds set up by public sector
banks and Life Insurance Corporation of India(LIC) and General Insurance Corporation of
India (GIC) SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987
followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug
89), Indian Bank Mutual Fund (Oct 92). LIC established its mutual fund (Nov 89), Bank of
India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in
June 1989 while GIC had set up its mutual fund in December 1990. At the end of 1993,
the mutual fund industry had assets under management of Rs. 47,004 crores.
Third Phase- 1993-2003 (Entry of Private Sector Funds)

With the entry of privates sector funds in 1993, a new era started in the Indian mutual
fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was
the year in which the first Mutual Fund Regulation came into being, under which all
mutual funds, excepts UTI were to be registered and governed. The erstwhile Kothari
Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund
registered in July 1993. The 1993 SEBI (Mutual Fund) Regulation were substituted by a
more comprehensive and Mutual Fund Regulations in 1996. The industry now function
under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund in India and
also the industry has witnessed several mergers and acquisitions.
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As at the end of January 2003, there were 33 mutual funds with total assets of Rs.
1,21,805 crores. The Unit Trust of India with Rs. 44,541 crores of assets under
management was way ahead of other mutual funds.
Fourth Phase-2003-2005:
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust
of India with assets under management of Rs. 29.835 crores as at the end of January
2003, representing broadly, the asset of US 64 scheme, assured return and certain other
schemes. The Specified Undertaking of Unit Trust of India, functioning under an
administrator and under the rules framed by Government of India and does not come
under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC .it is registered
with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the
erstwhile UTI which had in March 2000 more than Rs. 76,000 crores of assets under
management and with the setting up a UTI Mutual Fund, conforming to the SEBI
Mutual Fund Regulations, and with recent mergers taking place among different private
sector funds, the mutual fund industry has entered.
Its current phase of consolidation and growth, as at the end of September 2004 were 29
fund, which manage assets of Rs. 153108 crores under 421 schemes.
Who can invest in mutual fund

1. Individuals
2. Minors(through parent/legal guardian)
3. NRI’s
4. Karta of HUF
5. Companies, body corporate
6. Charitable trusts
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Types of mutual fund
I. BY STRUCTURE
 Open-ended schemes
 Close-ended schemes
 Interval schemes
II. BY NATURE
 Equity fund
 Debt fund
 Balanced fund
III. BY INVESTMENT OBJECTIVE

 Growth schemes
 Income schemes
 Balanced schemes
 Money market schemes
IV. OTHER SCHEMES

 Tax saving scheme
 Index schemes
 Sector specific schemes
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(a) On the basis of objective

Equity Funds/Growth Funds.
Funds that invest in equity shares are called equity funds. They carry the principal
objective of capital appreciation of the investment over the medium to long-term. The
returns in such funds are volatile since they are directly linked to the stock markets.
They are best suited for investors who are seeking capital appreciation. There are
different types of equity funds such as Diversified funds, Sector specific funds and Index
based funds.
Diversified fund
These funds invest in companies spread across sectors. These funds are generally meant
for risk-taking investors who are not bullish about any particular sector.
Sector funds
These funds invest primarily in equity shares of companies in a particular business
sector or industry. These funds are targeted at investors who are extremely bullish
about a particular sector.
Index funds
These fund invest in the same pattern as popular market indices like S&P 500 and BSE
Index. The value of the index fund varies in proportion to the benchmark index.
Tax saving funds

These funds offer tax benefits to investors under the Income Tax Act. Opportunities
provided under this scheme are in the form of tax rebates U/s 88as well saving in Capital
Gains U/s 54EA and 54EB. They are best suited for investors seeking tax concessions.
Debt /Income Funds

These funds invest predominantly in high-rated fixed-income-bearing instruments like
bonds, debentures, government securities ,commercial paper and other money market
instruments. They are best suited for the medium to long-term investors who are averse
to risk and seek capital preservation. They provide regular income and safety to the
investors.
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Liquid Funds/ Money Market Funds

These funds invest in highly liquid money market instruments. The period of investment
could be as short as a day. They provide easy liquidity. They have emerged as an
alternative for saving and short-term fixed deposit accounts with comparatively higher
returns. These funds are ideal for Corporates, institutional investors and business
houses who invest their funds for very short periods.
Gilt funds
These funds invest in central and State Government securities. Since they are
Government backed bonds they give a secured return and also ensure safety of the
principal amount. They are best suited for the medium to long-term investors who are
averse to risk.
Balanced funds
These funds invest both in equity shares and fixed- income-bearing instruments (debt)
in some proportion. They provide a steady return and reduce the volatility of the while
providing some upside for capital appreciation. They are ideal for medium-to long- term
investors willing to take risks.
Hedge Funds
These funds adopt highly speculative trading strategies. They hedge risks in order to
increase the value of the portfolio.
(b) On the basis of Flexibility

Open- ended Funds
These funds do not have a fixed date of redemption. Generally they are open for
subscription and redemption throughout the year.
Their prices are linked to the daily net asset value (NAV). From the investors’
perspective, they are much more liquid than closed-ended funds. Investors are
permitted to join or withdraw from the fund after an initial lock-in period.
Close-ended Funds
These funds are open initially for entry during the Initial Public Offering (IPO) and
thereafter closed for entry as well as exit. These funds have a fixed date of redemption.

One of the characteristics of the close-ended schemes is that they are generally traded
at a discount to NAV; but the discount narrows as maturity years. These funds are open
for subscription only once and can be redeemed only on the fixed date of redemption.
The units of these funds are listed (with certain exceptions), are tradable and the
subscribers to the fund would be able to exyt from the fund at any through the
secondary market.
Interval Funds
These funds combine the features of both open-ended and close –ended funds wherein
the fund is close-ended for the couple of years and open-ended thereafter. Some funds
allow fresh subscription and redemption at fixed times every (say every six months) in
order to reduce the administrative aspects of daily entry or exit, yet providing
reasonable liquidity.
(c)On the basis of Geographic location
Domestic Funds
These funds mobilize the savings of nationals within the country.
Offshore Funds
These funds facilitate cross border fund flow. They invest in securities of foreign
companies.
The mutual fund universe can be divided into six basic styles:
1. Small cap growth funds
2. Large cap growth funds
3. Small cap value
4. Large cap value
5. Foreign funds
6. Fixed income funds

Different plans that mutual fund offer
Growth Plan and Dividend Plan
A growth plan is a plan under a scheme wherein the returns from investment thus only
reinvested and very few income distribution, if any, are made. The investors thus only
realizes capital appreciation on the investment. This plan appeals to investors in the
high income bracket. Under the dividend plan, income is distributed from time to time.
This plan ideal to those investors requiring regular income.
Dividend Reinvestment Plan
Dividend plans of schemes carry an additional option for reinvestment of income

distribution. This is referred to as the dividend reinvestment plan. Under this plan,
dividends declared by a fund reinvested on behalf of the investor, thus increasing the
numbers of units held by the investors.
Automatic Investment Plan
Under the Automatic Investment Plan (AIP) also called Systematic Investment Plan (SIP),
the investors is given the option for investing in a specified frequency of months in a
specified scheme of the Mutual Fund for a constant sum of investment. AIP allows the
investors to plan their saving through a structured regular monthly savings program.
Automatic Withdrawal Plan
Under the Automatic Withdrawal Plan (AWP)also called Systematic Withdrawal Plan
(SWP), a facility is provided to the investor to withdraw a pre-determined amount his
fund at a pre-determined interval.

Structure of mutual funds in India
Mutual Funds in India follow a 3-tier structure.
The first is the sponsor who things of starting the fund.

The second tier is the trustee. The Trustees role is not to manage the money. Their job is
only to see, whether the money is being managed as per stated objectives. Trustees
may be seen as the interval regulators of a mutual fund.
Trustees appoint the Asset Management Company (AMC) who from the third tier, to
manage investor’s money. The AMC in return charges a fee for the services provided
and this fee is borne by the investors as it is deducted from the money collected from
them.
Sponsor
Any corporate body which initiates the launching of a mutual fund is referred to as “The
sponsor”. The sponsor is expected to have a sound track record and experience in
financial services for a minimum period of 5 years and should ensure various formalities
required in establishing a mutual fund. According to SEBI, the sponsor should have
professional competence, financial soundness and reputation for fairness and integrity.
The sponsor contributes 40% of the net worth of the AMC. The sponsor appoints the
trustee, the AMC and custodians in compliance with the regulations.
Trustee
Sponsor creates a public trust and appoints trustees. Trustees are the people authorized
to act on behalf of the Trust. They hold the property of mutual funds. Once the Trust is
created, it is registered with SEBI after which this trust is known as the mutual fund. The
Trustees role is not to manage the money but their job is only to see, whether the
money is being managed as per stated objectives. Trustees may be seen as the internal
regulators of a mutual fund. A minimum of 75% of the trustees must be independent of
the sponsor to ensure fair dealings. Trustees appoint the Asset Management Company
(AMC), to manage investor’s money

Custodian
A custodian’s role is keeping custody of the securities that are bought by the fund
manager and also keeping a tab on the corporate action like rights. Bonus and dividends
declared by the companies in which the fund has invested. The custodian is appointed
by the Board of Trustees. The custodian also participates in a clearing and settlement
system through approved depository companies on behalf of mutual funds, in case of
dematerialized securities. Only the physical securities are held by the Custodian. The
deliveries and receipt of units of a mutual fund are done by the custodian or a
depository participant at the instruction of the AMC and under the overall direction and
responsibility of the Trustees. Regulation provide that the Sponsor and the Custodian
must be separate entities.
Asset Management Company (AMC)

Trustees appoint the Asset Management Company (AMC), to manage investor’s money.
The AMC in return charges a fee for the services provided and this fee is borne by the
investors as it is deducted from the money collected from them. The AMC ‘s Board of
Directors must have at least 50%of Directors who are independent directors. The AMC
has to be approved by SEBI. The AMC function under the supervision of it’s Board of
Directors, and also under the direction of the Trustees and SEBI. It is the AMC, which in
the name of Trust, floats new schemes and manage these schemes by buying and selling
securities. In order to do this the AMC needs to follow all rules and regulation
prescribed by SEBI and as per the Investment Management Agreement it sings with the
Trustees.
The role of the AMC is to manage investor’s money on a day to day basis. Thus it is
imperative that people with the highest integrity are involved with this activity. The
AMC cannot deal with a single broker beyond a certain limit of transactions. The AMC
cannot act as a Trustee for some other Mutual Fund.
Advantages in deallingnin mutual fund

1. Professional Management
2. Diversification
3. Return Potential
4. Low Costs
5. Transparency
6. Flexibility
7. Choice of schemes
8. Tax benefit

Conceptual frame work
Now in India, there is many mutual fund also investment companies working on both in
the public sector as well as in the private sector. These compete with both each other
for mobilizing the investment funds with individuals investors and other organizations
desirous of placing their funds with these mutual funds would like to know the
comparative performance of each. So to know the performance of each mutual fund
and to select the best mutual fund. It is necessary, to evaluation of the performance of
mutual funds and their returns.
Performance evaluation of mutual funds

To know the risk involved in returns of investment portfolio, There is are most
important and widely used measures of performance of mutual funds are:
1. The Sharpe’s Measure

2. The Treynor’s Measure
3. The Jenson’s Measure

Measuring mutual fund return

The first step in mutual fund evaluation is calculation of the rate of return earned over
the holding period. Return may be defined to include changes in the value of the mutual
fund over the holding mutual fund plus any income earned over the period. However,
in the case of mutual funds, during the holding period, cash inflow into the fund and
cash withdrawals from the fund may occur. The unit value method may be used to
calculate returns in this case.
The one period of return, r, for a mutual fund mat then be defined as the change in the
per unit net asset value (NAV), plus it’s per unit cash disbursements (D) and per unit
capital gains disbursements (C) such as bonus shares, it may be calculated as.
(𝐍𝐀𝐕𝐭−𝑵𝑨𝑽𝒕−𝟏)+𝑫𝑻+𝑪
RAP =
𝑵𝑨𝑽−𝟏
Where
NAVt =NAV per unit at the end of the holding period
NAVt-1= NAV per unit at the beginning of the holding period
DT = cash disbursements per unit during the holding period
C = Capital gains disbursements per unit during the holding period
This formula gives the holding period yield or rate of return earned on a mutual fund.
This may be expressed as a percentage.

The Sharpe’s measure:

In finance, the Sharpe ratio (also known as the Sharpe index, the Sharpe measure, and
the reward-to-variability ratio) is a way to examine the performance of an investment
by adjusting for its risk. The ratio measures the excess return (or risk premium) per unit
of deviation in an investment or a trading strategy, typically referred to as risk (and is a
deviation risk measure), named after William Forsyth Sharpe.
In this model, performance of fund is evaluated on the basis of sharpe ratio, which is
ratio of return generated by the fund over and above risk free return and the total risk
associated with it. According to Sharpe’s it is the total risk of the fund that the investors
are concerned about. So, this model evaluates funds on the basis of reward per unit of
total risk.
Average portfolio return−Risk free rate of return

Sharpe’s Index =
Standard Deviation of portfolio
Symbolically, it can be written as:
Rp−Rf
SP =
𝜎𝜌
Where:
Sp = Sharpe index
Rp = portfolio average return
Rf = Risk free rate of return
SDp = portfolio standard deviation
Sharpe’s performance index gives a single value to be used for the performance ranking
of various funds or portfolio. Sharpe index measures the risk premium of the portfolio
relative to the total amount of risk in the portfolio. This risk premium is the difference
between the portfolio’s average rate of return and the riskless rate of return. The
standard deviation of the portfolio indicates the risk. The index assigns the highest
values to assets that have best risk- adjusted average rate of return.

 Sharpe measures>market measures

 The larger the sharpe index, better the fund has performed
 Sharpe index can be used to rank the desirability of the fund of portfolio’s, but on the
individual assets. The individual asset contains its diversifiable risk.

The Treynor’s Measure

It was developed by Jack Treynor’s index is a ratio of the return generated by the fund
over and above risk free return (T-Bills) during the given period of time and systematic
risk associated with beta.
Average portfolio return−Risk free rate of return

Trenor’s index =
Market risk of portfolio
𝑹𝒑−𝑹𝒇
Ti =
𝜷𝝆
Where:
Ti = Treynor’s performance index
Rp = portfolio’s actual return during a specified time period
Rf = Risk free rate of return during the same period
Βp = beta of the portfolio
 Whenever Rp> Rf and Βp>0, a larger Ti value means a better portfolio for all investors
regardless of their individual risk preferences.
 If there is a negative Ti value when Rp<Rf or when βp < 0, the portfolio performance
will be very poor.
 However, if the negative Ti value comes from a negative beta, fund’s performance is
superb.
 Finally when Rp –Rf, and Bp are both negative, Ti value will be positive, but in order to
quality the fund’s performance as good or bad we should see whether Rp is above or
below the security market line pertaining to the analysis period (Reilly, 1992).

The Jensen’s Measure

Jensen’s model proposes another risk adjusted performance measure. Michael jenson
developed this measure and is something referred as the differential return method.
This measure involves evaluation of returns that the fund has generated vs, the return
actually out of the fund given at that level of systematic risk. The surplus between the
two returns is called Alpha, which measures the performance of a fund compared with
the actual returns over the period. Required rate of return on fund at a given level of
beta
𝛂𝛒
Rp=
𝛃𝛒
Where:
Rp=Rf+βp(Rm-Rf)
Rp=average return of portfolio
Rf=Riskless rate of return
α = The intercept
β=A measure of systematic risk
Rm= average market return
Jensen’s alpha was first used as a measured in evaluation of mutual fund managers by
Michael Jensen in 1968. The CAPM return is supposed to be ‘risk adjusted’, which
means it takes account of the relative riskless of the assets. After all, riskier assets will
have higher expected returns than less risky assets. If an asset’s return is even higher
than the risk adjusted return, that assets is said to have “positive alpha “ or “abnormal
returns “. Investors are constantly seeking investments that have higher alpha.
Calculating alpha requires the following inputs: the relized return (on the portfolio the
market return the risk free rate of return, and the beta of the portfolio) can be easily
defined by using formula: jensen's alpha=[Risk Free Rate +Portfolio Beta*(Market
Return –Risk Free Rate)]/β

Concept of Beta
Beta is a measure of relative risk of a security or its sensitivity to the movements in the
market. It is a measure of volatility or the systematic risk faced by an assets or portfolio
or project. It is calculated by using the covariance between returns of assets and returns
of the market portfolio, divided by variance of the return on the market portfolio. It
shows how the price of a security responds to market factors. Market return is
measured by the average return of a large sample of stocks.
The Beta for the overall market is equal to 1.00 and other betas are viewed in relation
to this value. Beta can be positive or negative. Many large brokerage firms, investment
companies and financial consultants provide beta for large number of stocks.
Beta calculation
𝐍∗∑XY−(∑X)(∑Y)
β=
𝑁∗∑X2−(∑X)2
Where
N = no of observations
∑X = Sum of X returns (Here X is market return)
∑Y = Sum of Y returns (Here Y is a particular funds return)
X2 = X*X
∑XY = sum of X*Y

CHAPTER-2
LITERATURE REVIEW

LITRATURE REVIEW
Sl.No Writer Name Title of the article DOP Published in
1 Sharad panvar Characteristics and performance 2005 Emerald Group

evaluation of selected mutual Published Ltd.
funds in India
2 Laurens Swinkes Performance evaluation of polish 2009 Value research
mutual fund managers online
3 Navdeep An empirical study on performance 2007 Value research
Aggarwal and of mutual funds in India online
Mohit Gupta
4 Prof. kalpesh Comparative study on performance 2017 Emerald Group
P prajapati evaluation of mutual fund schemes Publishing Ltd
Prof. Mahesh Indian companies
K Patel

ARTICLE -1
Characteristics and performance evaluation of selected mutual funds in

India
Year:2005
Author: sharad panvar
Abstract
The objective of the study is to identify differences in characteristics of public-sector sponsored
and private-sector sponsored mutual funds and to find the extent of diversification in the
portfolio of public -sector sponsored and private -sector sponsored mutual funds and to
compare the performance of the public-sector sponsored and private-sector sponsored mutual
funds using traditional investment measures. The study found that public-sector sponsored
private-sector Indian sponsored and private –sector foreign sponsored mutual funds do not
differ statistically in terms of portfolio characteristics such as net asset, common stock%,
market capitalization, holdings, Top Ten %. Portfolio characteristics measured through private-
sector Indian sponsored mutual funds seems to have outperformance both private-sector
sponsored and private-sector foreign sponsored mutual funds.

ARTICLE -2
Performance evaluation of polish mutual fund managers
Year:2009
Author: Laurens Swinkels and Pawel Rzeznizak
Abstract
The purpose of this paper is to empirically assess the investment performance of mutual
fund managers who operate in the polish market. The paper uses monthly mutual fund
returns over the period 2000-2007 to investigate the manager’s selectivity and market
timing skills. It analyzes three investment mutual fund investment categories: equity,
balanced, and bond mutual funds. The paper investigates several performance
evaluation models, and shows that the findings are robust with respects to the paper
positive, but insignificant selectivity skills of the mutual fund managers. No evidence is
found of bond or equity market timing skills in the sample.
Since not many mutual funds exist a long period, the sample used is relatively small with
38 mutual funds, while in April 2007 more than 300 funds are listed in the polish
market. Private investors in Poland are not worse off by investing in mutual funds
compared to passive market indices. Based on the research, they should select mutual
funds that focus on selectivity rather than market timing. The research on mutual fund
manager skill in emerging economics is scarce. In addition, little is know on the
performance of balanced and bond mutual funds, even in developed mutual fund
markets. This paper contribution by filling both these gaps in the academic literature.

ARTICLE -3
An empirical study on performance of mutual funds in India
Year : 2007
Author :Navdeep Aggarwal and Mohit Gupta
Abstract
The core study deals with how mutual fund emerged in the Indian market. The research on
mutual fund has been confined to a few development markets. Although emerging market such
as Indian has attracted the attracted the attention of investors all over the world.
According to a (2009) mutual fund investors survey conducted by the investment company
institute, 82% of respondents who owned funds outside of their defined contribution plan
report purchasing their fund through a professional financial advisor. Within this group, two of
the most common reason for using an advisor are for help with asset allocation and because
they “want a financial professional to explain various investment option “. Eight-six percent
reported receiving three or more services from their advisor. Of the 14% of surveyed investors
who never use a financial advisor, the top reasons are because they “want to be in control of
own. Investments” and because they “have access to all the resources needed to invest on
own. “This survey suggest that the majority of the majority of fund investors value the advise
that comes bundled with a fund purchased through a financial advisor. It also suggests that
investors who do not us a financial advisor have very different investment needs, and place a
higher value on access to information that they themselves can evaluate and use in their
decision-making.

ARTICLE-4
Comparative study on performance evaluation of mutual fund schemes of

Indian companies
Year :2017
Author :Prof. Kalpesh p prajapati, Prof. Mahesh K Patel,
Abstract
In this paper the performance evaluation of Indian mutual funds is carried out through
relative performance index, risk-return analysis, Treynor’s ratio, Sharpe’s ratio, sharpe’s
measure, Jensen’s measures, and Fama’s measures . the data used is daily closing NAVs.
The source of data is website of Associated of Mutual Funds in India (AMFI). The study
period is 1st January 2015 to 31st December. The result of performance measures
suggest that most of the mutual fund have given positive return during 2015 to 2017


CHAPTER-3
COMPANY PROFILE

PROFIELS OF SELECTED COMPANIES
1. TATA EQUITY OPPORTUNITES FUND
Objectives: The investment objective of the scheme is to provide income distribution
and or medium to long term capital gains hile at all times emphasizing the importance of
capital appreciation.
Scheme details:
Mutual Fund Family TATA EQUITY OPPORTUNITIES FUND
Fund Type Open-Ended
Investment Plan Growth
Launch date Mar31, 1993
Benchmark BSE 200
Asset Size(Rs cr) 1287.8(as on Feb 28,2018)
Minimum investment Rs.5000
Fund manager Rupesh Patel
Exit Load 1%
Website http://www.tatamutualfund.com

2. HSBC EQUITY MUTUAL FUND
Objectives:
Aims to generated long term capital growth from an actively managed portfolio of
equity and equity related securities.
Schemes Details:
Mutual Fund Family HSBC EQUITY MUTUAL FUND
Fund Type Open –Ended
Launch date Dec 03, 2002
Bench mark BSE 200
Asset size(Rs cr) 10261.01(as on Mar 31-2018)
Minimum Investment 5000
Fund Manger Tushar pradhan
Exit Load 1%
Website http:/www.assetmanarement.hsbc.com/in

3. CANARA ROBECO EQUITY DIVERSIFIED-GROWTH
Objective:
To generate capital appreciation by investing in equity and equity related securities.
Scheme details:
Mutual Fund Family CANARA ROBBECO EQUITY

DIVERSIFIEED-GROWTH
Launch date Sep 16. 2003
Bench mark BSE 200
Asset Size (Rs cr) 811(as on Mar 31. 2018)
Fund Manager Ravi Gopal Krishnan
Exit Load 1%
Website http://www.canararobeco.com

4. JM EQUITY FUND
Objectives:
To provide optimum capital growth and appreciation.
Scheme details:
Mutual Fund Family CANARA ROBECO EQUITY

DIVERSIFIED – GROWTH
Launch date Dec 12. 1994
Benchmark BSE 200
Asset Size(Rs cr) 2180(Mar 31. 2018)
Fund Manager Sanjay Chhabaria
Exit Load 1%
Website http://www.JMFinancialmf.com

5. BIRLA SUNLIFE EQUITY FUND
Objective:
An open –ended growth scheme with the objectives to achieve long-term growth of
capital at relatively moderate levels of risk by making investments in securities of multi-
national companies through a research based investment approach
Scheme Details:
Mutual Fund Family BIRLA SUN LIFE EQUITY FUUND
Launch date Dec 27,1999
Benchmark BSE 200
Asset Size(Rs cr) 8503 (as on Mar 31, 2018)
Fund Manager Ajay Garg
Exit Load 1%
Website http://www.mutualfund.birlasunlife.com

PROJECT METHODOLOGY
PROJECT DESIGN ;
 A details study is done on various investment schemes

 Analysis is done on the performance evaluation of some selected Mutual Funds
 The study is undertaken scientifically, analysis and interpretation on collected
data by different Mutual Funds companies from websites.
 This study is useful to the investors to decides there saving in the particular
schemes available with the company.
 The research is done by collecting secondary data and that same data is been
collected data is analyzed by the 3 methods –Sharpe, Treynors, Jensen Ratio’s.
Data Collection procedure
Secondary Data
This secondary data is collected from secondary sources. This data was collected
from past records, books internet and other published data.
 Internet sources
 Newspapers
 websites
 books
period of the study

For the study data collected for three years, from the period 1 st January
2015 to 31st December 2017

CHAPTER-4
DATA ANALYSIS

DATA ANALYSIS AND INTERPRETATION
MARKET RETURNS OF BSE 200(Benchmark Index)
YEAR OPEN CLOSE R ̅)

(R-𝑹 (R-R)2
2015 2543.96 1850.89 -27.24 -29.63 877.93

2016 1857.46 2424.38 30.52 28.13 791.29
2017 2435.31 2530.58 3.91 1.52 2.31
7.91 1671.53
𝐜𝐥𝐨𝐬𝐞−𝐨𝐩𝐞𝐧
R= *100
𝐨𝐩𝐞𝐧
∑(𝑹)
R =
𝑵
7.91
=
3
=2.63
∑(𝑹−𝑹)𝟐
V=
𝑵
1671.53
=
3
=555.17
SD= √555.17
=23.60

Return of the fund

R
V Variance of the fund
SD Standard deviation of fund return
𝛽 Beta
Α Alpha
Sp Sharpe’s ratio of fund
Ti Treynor’s ratio of fund
RP Jensen ratio of fund
Rp Portfolio average return
Rf Risk free rate of return
𝜎𝜌 Portfolio standard deviation
𝛽𝜌 Beta of the portfolio

RETURNS OF TATA EQUITY OPPRTUNITYIES FUND
YEARS OPEN CLOSE R (R-R) (R-R)2

2015 86.266 66.021 -23.46 -29.35 861.42
2016 65.943 88.282 33.87 27.98 782.88
2017 89.076 95.553 7.27 1.38 1.90
17.68 1646.20
𝒄𝒍𝒐𝒔𝒆−𝒐𝒑𝒆𝒏
R= *100
𝒐𝒑𝒆𝒏
∑(𝑅)
R=
𝑁
17.68
=
3
= 5.89
∑(R−R)2
V=
𝑁
1646.20
=
3
=548.73
SD=√548.73
=23.42

BETA OF TATA EQUITY OPPORTUNITIES FUND
YEAR BSE200 MUTUAL X Y X*Y X2

FUND
OPEN CLOSE OPEN CLOSE
2015 2543.96 1850.89 86.266 66.021 - - 639.05 742.01
27.24 23.46
2016 1857.46 2424.38 65.946 88.282 30.52 33.87 1033.71 931.47
2017 2435.31 2530.58 89.076 95.553 3.91 7.27 28.42 15.28
7.91 17.68 1701.18 1688.76
N ∗ ∑XY − (∑X)(∑Y)
β=
N ∗ ∑X2 − (∑X)2
3∗1701.180−(7.91)(17.68)
=
3∗1688.76−(7.91)2
= 0.99
The Sharpe measure

𝑅𝑝−𝑅𝑓
Sp =
𝜎𝜌
5.89−8.86
=
23.42
=- 0.1268
The treynor’s measures

𝑅𝑝−𝑅𝑓
TI =
𝛽𝜌
5.89−8.86
= 0.99
=-3.05

The Jenesen’s Measures

𝛼𝜌
RP=
𝛽𝜌
Where:
𝛼𝜌 = 𝑦 + 𝛽𝜌𝑋
∑𝑌
γ̅ = 𝑁
17.68
=
3
= 5.89
∑𝑋
𝑋̅ =
𝑁
7.19
= 3
= 2.63
𝛼𝜌 = 𝑌̅ +𝛽 𝑋̅
= 5.89+(0.99)*2.63
= 8.2561
αρ
RP=
βρ
8.25
=
0,99
=8.33

Performance of Tata Equity Mutual Fund
Sharpe’s -0.12
Treynor’s -3.05
Jensen’s 8.33
Performance of TATA equity opporunities

fund
10
0
sharpe's Treynor's Jensen's
-2
-4
INTERPRETATION:
From above graph and table shows that this difference between the Sharpe’s Treynor’s and
Jensen’s Ratio on TATA equity opportunities fund. The Sharpe’s and Treynor’s ratio shows an
negative ratio than Jensen’s ratio. So Jensen’s is the best measure to evaluate the performance
compared to Sharpe’s, Treynor’s. Because it considers all the parameters of analysis.

RETURNS OF HSBC Equity Fund
YEAR OPEN CLOSE R (R-R) (R-R)2

2015 111.638 87.981 -21.19 -22.66 513.47
2016 86.377 106.388 23.16 21.69 470.45
2017 107.198 109.822 2.44 0.97 0.94
4.41 984.86
close−open
R= *100
open
∑(𝑅)
R =
𝑁
4.41
=
3
= 1.47
∑(𝑅−𝑅)2
V=
𝑁
984.86
=
3
= 328.28
SD =√328.28
=18.11

BETA OF HSBC Equity Fund
YEAR BSE200 MUTUA X Y X*Y X2

L FUND
2015 2543.96 1850.89 111.638 87.981 -27.24 -21.19 577.21 742.01
2016 1857.46 2424.38 86.377 106.388 30.52 23.16 706.84 931.47
2017 2435.31 2530.58 107.198 109.822 3.91 2.44 9.54 15.28
7.91 4.41 1239.59 1688.76
𝑁∗∑𝑋𝑌−(∑𝑋)(∑𝑌)
𝛽=
𝑁∗∑𝑋2−(∑𝑋)2
3∗1293.59−(7.91)(4.41)
=
3∗1688.76−(7.91)2
= 0.7686
The Sharpe measure

𝑅𝑝−𝑅𝑓
Sp =
𝜎𝜌
1.47−8.86
=
18.11
= -0.4080
The Treynor’s measure

𝑅𝑝−𝑅𝑓
TI =
𝛽𝜌
1.47−8.86
=
0.76
= -9.7236


𝛼𝜌
RP=
𝛽𝜌
Where:
𝛼𝜌 = 𝑦̅ +𝛽𝜌 +𝑋̅
∑𝑌
y̅ =
𝑁
4.41
=
3
= 1.47
∑𝑋
𝑋̅ =
𝑁
7.91
=
3
=2.63
𝛼𝜌 = 𝑌̅ +𝛽 𝑋̅
=1.47+(0.76)*2.63
=3.4688
𝛼𝜌
RP =
𝛽𝜌
3.46
=
0.76
= 4.56

Performance of HSBC Equity Mutual Fund
Sharpe’s -0.40
Treynor’s -9.72
Jensen’s 4.56
performance of HSBC Equity fund
0
Sharpe's Treynor's Jensen's
-2
-4
-6
-8
INTERPRETATION:
From above graph and table shows that this difference between the Sharpe’s, Treynor’s and
Jensen’s Ratio on HSBC equity fund. The Sharpe’s and Treynor’s ratio shows an negative ratio
than Jensen’s ratio.so Jensen’s is the best measure to evaluate the performance compared to
Sharpe’s, Treynor’s because it considers all the parameters of analysis.

RETURNS OF CANARA ROBECO EQUITY DIVERSIFIED- GROWTH

2015 57.55 48.39 -15.91 -22.03 485.32
2016 48.23 63.27 31.18 25.06 628.00
2017 63.93 65.91 3.09 -3.03 9.18
18.36 1122.50
𝒄𝒍𝒐𝒔𝒆−𝒐𝒑𝒆𝒏
R= *100
𝒐𝒑𝒆𝒏
∑(𝑅)
R=
𝑁
18.36
= 3
=6.12
∑(𝑅−𝑅)2
V =
𝑁
1122.50
=
3
=374.16
SD = √374.16
= 19.34

BETA OF CANARA ROBECO EQUITY DIVERSIFIED-GROWTH

L FUND
2015 2543.96 1850.89 57.55 48.39 -27.24 -15.91 433.38 742.01
2016 1857.46 2424.38 48.23 63.27 30.52 31.18 951.61 931.47
2017 2435.31 2530.58 63.93 65.91 3.91 3.09 12.08 15.28
7.91 18.36 1397.07 1688.76
N ∗ ∑XY − (∑X)(∑Y)
𝛽=
N ∗ ∑X2 − (∑X)2
3∗1397.07−(7.91)(18.36)
=
3∗1688.76−(7.91)2
= 0.8085
The Sharpe measure

𝑅𝑝−𝑅𝑓
Sp =
𝜎𝜌
6.12−8.86
=
19.34
= -0.1416
The Treynor’s measure

𝑅𝑝−𝑅𝑓
TI =
𝛽𝜌
6.12−8.86
=
0.80
= -3.42


𝛼𝜌
RP =
𝛽𝜌
Where :
𝛼𝜌 = 𝑌̅ +𝛽𝜌 𝑋̅
∑𝑌
𝑌̅ =
𝑁
18.36
=
3
= 6.12
∑𝑋
𝑋̅ =
𝑁
7.19
=
3
= 2.63
𝛼𝜌 = 𝑌̅ +𝛽 𝑋̅
= 6.12+(0.80)*2.63
= 8.22
αρ
RP =
βρ
8.22
=
0.80
= 10.28

Performance of CANARA ROBECO Equity Mutual Fund
Sharpe’s -0.14
Treynor’s -3.42
Jensen’s 10.28
performance of CANARA ROBECO Equity

fund
12
10
0
-2
-4
-6
INTERPRTATION
From above graph and table shows that difference between the Treynor’s and Jensen ‘s ratio
on Canara Robeco Equity fund. The Sharpe’s and Trenyor’s ratio shows an negative ratio than
Jensen’s is the best measure to evaluate the performance compared to Sharpe’s, Trenyor’s.
because it consider all the parameters of analysis .

RETURNS OF JM Equity Mutual fund

2015 40.307 27.872 -30.85 -30.08 904.80
2016 27.843 35.861 28.79 29.56 873.79
2017 36.453 36.353 -0.27 0.5 0.25
-2.33 1778.84
𝑐𝑙𝑜𝑠𝑒−𝑜𝑝𝑒𝑛
R= *100
𝑜𝑝𝑒𝑛
∑(𝑹)
R=
𝑵
−2.33
= 3
= 0.77
∑(𝑅−𝑅)2
V =
𝑁
1778.84
=
3
=592.94
SD=√592.94
= 24.35

BETA OF JM EQUITY MUTUAL FUND

L FUND
2015 2543.96 1850.89 40.307 27.872 -27.24 -30.85 840.35 742.01
2016 1857.46 2424.38 27.843 35.861 30.52 28.79 878.67 931.47
2017 2435.31 2530.58 36.453 36.353 3.91 -0.27 -1.05 15.28
7.91 -2.33 1717.97 1688.76
N ∗ ∑XY − (∑X)(∑Y)
β=
N ∗ ∑XY − (∑X)2
3∗1717.97−(7.91)(−2.33)
= 3∗1688.76−(7.91)2
= 1.0337
The Sharpe Measures

𝑅𝑝−𝑅𝑓
Sp=
𝜎𝜌
−0.77−8.86
=
24.35
= -0.3955
The Treynor’s Measures

𝑅𝑝−𝑅𝑓
TI =
𝛽𝜌
−0.77−8.86
=
1.03
= -9.00


𝛼𝜌
RP=
𝛼𝜌
Where:
𝛼𝜌 = 𝑌̅ +𝛽 𝑋̅
∑𝑌
𝑌̅ =
𝑁
−2.33
=
3
= 0.776
∑𝑋
𝑋̅ =
𝑁
7.19
=
3
= 2.63
𝛼𝜌 = 𝑌̅ +𝛽 𝑋̅
= -0.77+(1.03)*2.63
=1.9389
𝛼𝜌
RP =
𝛽𝜌
1.93
=
1.03
= 1.8737

Performance of JM Equity Mutual Fund
Sharpe’s -0.39
Treynor’s -9.00
Jensen’s 1.87
performance of JM Equity fund

6
0
-2
-4
-6
-8
Interpretation
on JM equity fund. The Sharpe’s and Trenyor’s ratio shows an negative ratio than Jensen’s is
the best measure to evaluate the performance compared to Sharpe’s, Trenyor’s. because it
consider all the parameters of analysis.

RETURNS OF Birla sun life Equity Mutual fund

2015 289.47 203.23 -29.79 -32.42 1051.05
2016 207.72 275.86 32.80 30.17 910.22
2017 280.57 294.28 4.88 2.25 5.06
7.89 1966.33
𝑐𝑙𝑜𝑠𝑒−𝑜𝑝𝑒𝑛
R= *100
𝑜𝑝𝑒𝑛
∑(𝑅)
R =
𝑁
7.89
=
3
= 2.63
∑(𝑹−𝑹)𝟐
V=
𝑵
𝟏𝟗𝟔𝟔.𝟑𝟑
=
𝟑
= 655.44
SD = √655. 44
= 25.60

BETA OF BIRLA SUN LIFE EQUITY MUTUAL FUND

L FUND
2015 2543.96 1850.89 289.47 203.23 -27.24 -27.24 811.47 742.01
2016 1857.46 2424.38 207.72 275.86 30.52 32.80 1001.05 931.47
2017 2435.31 2530.58 280.57 294.28 3.91 4.88 19.08 15.28
7.91 7.89 1831.60 1688.76
N ∗ ∑XY − (∑X)(∑Y)
β=
N ∗ ∑X2 − (∑X)2
3∗1831.60−(7.91)(7.81)
=
3∗1688.76−(7.91)2
=1.0856
The Sharpe Measures

𝑅𝑝−𝑅𝑓
Sp =
𝜎𝜌
2.63−8.86
=
25.60
= -0.2433
The Treynor’s Measures

𝑅𝑝−𝑅𝑓
TI =
𝛽𝜌
2.63−8.86
=
1.08
=-5.76

The Jensen’s Measures

𝛼𝜌
RP =
𝛽𝜌
Where:
𝛼𝜌 = 𝑌̅ + 𝛽𝜌 𝑋̅
∑𝑌
𝑌̅ =
𝑁
∑𝑋
𝑋̅ =
𝑁
7.19
=
3
= 2.63
𝛼𝜌 = 𝑌̅ + 𝛽 𝑋̅
= 2.64+(1.08)*2.63
= 5.4804
𝜶𝝆
RP =
𝜷𝝆
5.4804
= 1.08
= 5.0744

Performance of Birla Sunlife Euity Mutual Fund

Sharpe’s -0.24
Treynor’s -5.76
Jensen’s 5.07
performance of Birla sun life Equity Fund

6
0
-2
-4
-6
-8
Interpretation
on Birla Sunlife equity fund. The Sharpe’s and Trenyor’s ratio shows an negative ratio than
Jensen’s is the best measure to evaluate the performance compared to Sharpe’s, Trenyor’s.
because it consider all the parameters of analysis.

Sharpe’s measures of selected fund

FUNDS NAME SHARPE RATIO RANK
Tata equity opportunity fund -0.12 1
HSBC equity fund -0.4 5
Canara Robeco equity diverfied-growth -0.14 2
JM equity mutual fund -0.39 4
Birla sunlife equity fund -0.24 3
sharpe's Ratio
0
-0.05
-0.1
-0.15
Axis Title
-0.2
-0.25
-0.3
-0.35
-0.4
-0.45
canara
Tata equity robeco birla sun
HSBC JM equity
opportunit equity life equity
equity fund mutal fund
es fund diversified fund
-growth
Series1
Series2 -0.12 -0.4 -0.14 -0.39 -0.24
Interpretation
According to Sharpe’s model TATA equity opportunities fund is placed at first rank (-0.12) and
Canara Robeco Divrsified – growth, Birla Sunlife equity fund, JM equity mutual and, HSBC Equity
fund are placed 2,3,4,5 rank respectively .

TREYNOR’S MEASURES OF SELECTED FUNDS

FUNDS NAME TREYNOR'S RATIO RANK
JM equity mutual fund -9 4
Treynor's Ratio
0
-2
-4
Axis Title
-6
-8
-10
-12
Canara
TATA
Robeco JM equity
equity HSBC Birla sun
equity mutual
opportunity equity fund life fund
diversified fund
fund
growth
Series1 -3.05 -9.72 -3.42 -9 -5.76
INTRPRETATION :
According to Treynor’s model Tata equity opportunities fund is placed at first rank (-3.05).
Canara Robeco equity diversified –growth, Birla sun life equity fund, JM equity mutual fund,
HSBC equity fund are placed 2,3,4,5 rank respectively.
JENSEN’S MEASURES of SELECTED FUNDS
FUNDS NAME JENSEN’S RATIO RANK

Tata equity opportunity fund 8.57 2
HSBC equity fund 4.56 4
Canara Robeco equity diversified-growth 10.28 1
JM equity mutual fund 1.87 5
Birla sun life equity fund 5.07 3
JENSEN'S RATIO
12
10
8
Axis Title
0
canara
Tata equity Robeco JM equity Birla sun
HSBC
opprtunitie equity mutual life equity
equity fund
s fund diversifed- fund fund
growth
Series1 8.57 4.56 10.28 1.87 5.07
INTERPRETATION :
According to Jensen’s model Canara Robeco equity diversified-growth is placed at first rank
(10.28) Tata equity opportunities fund, Birla sun life equity fund, HSBC equity fund, JM equity
mutual fund are placed 2,3,4,5,rank respectively.

TREYNOR’S MEASURES OF SELECTED FUNDS

FUNDS NAME TREYNOR'S RATIO RANK
JM equity mutual fund -9 4
Treynor's Ratio
0
-2
-4
Axis Title
-6
-8
-10
-12
Canara
TATA
Robeco JM equity
equity HSBC Birla sun
equity mutual
opportunity equity fund life fund
diversified fund
fund
growth
Series1 -3.05 -9.72 -3.42 -9 -5.76
INTRPRETATION :
According to Treynor’s model Tata equity opportunities fund is placed at first rank (-3.05).
Canara Robeco equity diversified –growth, Birla sun life equity fund, JM equity mutual fund
HSBC equity fund are placed 2,3,4,5 rank respectively

CHAPTER-5
FINDINGS AND CONCLUCTION

FINDINGS
The study based on 5 different companies mutual funds schemes after studying industy the
company profile and anlysing different mutual funds schemes the following findings can be
made.
 Among the selected funds tata equity opportunities fund is giving high expected rterun
when compaired to other funds that is 5.89 Canara Robeco equity divercified growth
E(R) is a 6.12 and Birla sunlife equity fund -2.63, HSBC equity mutual fund- 1.47 and JM
equity -0.77 tata equity opportunity fund is performing every well on the return of fund
it may take 1st place in Indian mutual fund industry very soon.
 High risky fund is Birla Sunlife equity fund is giving a high risk when compaired to other
funds that is 25.60 and very less risky fund is Hsbc equity mutual fund because it having
(SD) it is very less than compared to other funds
 Birla Sunlife equity fund is having a beta of 1.08 and JM equity of beta 1.03 Tata equity
opportunity fund Beta is 0.99 it is very high Beta among the 5 funds
 Cananra Robeco equity divercified-Growth fund having a alpha of 8.25 and Tata equity
opportunities fund Alpha is 8.22 it is high when compared to other funds
 Tata equity oppertuninty fund having highest Sharpe’s ratio that is -0.12 so it so superior
risk adjusted performance. HSBC equity mutual fund having a Sharpe’s ratio is -0.4 is
less when compared other funds it shows an unfavorable performance
 Tata equity opportunity fund having highest Treynor’s ratio that is -0.35 so it show
superior risk adjusted performance. HSBC equity mutual fund having a Treynors ratio is -
9.72 is lees when compared to other fund it shows unfavorable performance.
 CanaraRobeco equity divercified –Growth fund having highest Alpha and Jensen ratio
tha is 10.28 so it superior performance of the fund. JM equity fund having a negative
Alpha as well as Jensen ratio it represents unfavorable performance funds

CONCLUSION
The study of “Performance evaluation of selected mutual funds” will give guide to the
new investor who wants to invest in equity by providing knowledge about measurement of the
risk and return of a particular mutual fund schemes.
The over all good performance of the funds this a sign of development in new era in capital
market. On the basis of the analysis it is concluded that performance analysis of selected
mutual funds schemes during the study period is good.
So there is bright future for mutual fund in india because they meet investors need perfectly.
This will boost up the Indian as well as foreign investors.

6.4 BIBLIOGRAPHY:
Books Referencew
 Punithavathy pandian: “Security Analysis and Portfolio Management” Vikas Publishing
House Pvt Ltd, NOIDA.
 Prasanna Chandra: “Investment Analysis and Portfolio Management”, Tata Mcgraw Hill
Publishing Company Ltd, New Delhi.
Website
 www.mutualfundindia.com
 www.amfindia.com
 www.moneycontrol.com
 http://bseindia.com

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“PERFORMANCE EVALUTION OF SELECTED MUTUAL FUNDS”

PESCE MANDYA Page 1

PESCE MANDYA Page 2

Introduction of the study

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Background of the study

Risk associated with a fund, in a general, can be defined as variability or fluctuations in

In the order to determine the risk-adjustment return of investment portfolio, there is

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Rational for the study

Statement of the problem

Though past performance alone cannot be indicative of future performance, it is frankly,

Objectives the study

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Scope of the study

Limitation of the study

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History of the mutual fund

Second Phase-1987-1993(Entry of Public Sector Funds)

Third Phase- 1993-2003 (Entry of Private Sector Funds)

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Who can invest in mutual fund

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Types of mutual fund

III. BY INVESTMENT OBJECTIVE

IV. OTHER SCHEMES

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(a) On the basis of objective

Tax saving funds

Debt /Income Funds

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Liquid Funds/ Money Market Funds

(b) On the basis of Flexibility

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(c)On the basis of Geographic location

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Different plans that mutual fund offer

Growth Plan and Dividend Plan

Dividend Reinvestment Plan

Dividend plans of schemes carry an additional option for reinvestment of income

Automatic Investment Plan

Automatic Withdrawal Plan

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Structure of mutual funds in India

Mutual Funds in India follow a 3-tier structure.

The first is the sponsor who things of starting the fund.

PESCE MANDYA Page 14

Asset Management Company (AMC)

Advantages in deallingnin mutual fund

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Conceptual frame work

Performance evaluation of mutual funds

1. The Sharpe’s Measure

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Measuring mutual fund return

NAVt =NAV per unit at the end of the holding period

NAVt-1= NAV per unit at the beginning of the holding period

DT = cash disbursements per unit during the holding period

C = Capital gains disbursements per unit during the holding period

PESCE MANDYA Page 17

The Sharpe’s measure:

Average portfolio return−Risk free rate of return

Symbolically, it can be written as: