Performance of Mutual Funds

Topics: Mutual fund, Investment, Collective investment scheme Pages: 55 (14212 words) Published: January 17, 2011

1.1 General :
A mutual fund is just the connecting bridge or a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the gathered money into specific securities (stocks or bonds). When you invest in a mutual fund, you are buying units or portions of the mutual fund and thus on investing becomes a shareholder or unit holder of the fund.

Mutual funds are considered as one of the best available investments as compare to others they are very cost efficient and also easy to invest in, thus by pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own. But the biggest advantage to mutual funds is diversification, by minimizing risk & maximizing returns

1.2 Problem Identification:
The study basically made to educate the investors about Mutual Funds. Analyze the various schemes to highlight the risk and return of diversity of investment that mutual funds offer. Thus, through the study one would understand how a common man could fruitfully convert a pittance into great penny by wisely investing into the right scheme according to his risk- taking abilities. 1.3 OBJECTIVES:

1. To project mutual funds as the ‘productive avenue’ to invest in contrast to the laxity of ‘bank investing’.

2. To show the wide range of investment options available in MF’s by explaining various schemes offered by different AMC’s.

3. To help an investor to make a right choice of investment, while considering the inherent risk factors.

4. To understand the recent trends in the MF world.

5. To understand the risk and return of the various schemes.

6. To find out the various problems faced by Indian mutual funds and possible solutions.


The study is limited to the analysis made for a Growth scheme offered by four AMC’s. Each scheme is calculated their risk and return using different performance measurement theories. The reason for such performance is immediately analyzed in the commentary. Graphs are used to reflect the portfolio risk and return.


This study is basically depends on

1. Primary Data
2. Secondary Data

Primary data: The primary data collected from the different companies through enquiry.

Secondary data: The secondary data collected from the different sites, broachers, news papers, company offer documents, different books and through suggestions from the project guide and from the faculty members of Noble P.G.College.

The following parameters were considered for analysis:
• Beta
• Alpha
• Correlation coefficient
• Treynor’s Ratio
• Sharpe’s Ratio


1. The study is conducted in short period, due to which the study may not be detailed in all aspects. 2. The study is limited only to the analysis of different schemes and its suitability to different investors according to their risk-taking ability. 3. The study is based on secondary data available from monthly fact sheets, web sites; offer documents, magazines and newspapers etc., as primary data was not accessible. 4. The study is limited by the detailed study of various schemes. 5. The NAV’S are not uniform.

6. The data collected for this study is not proper because some mutual funds are not disclosing the correct information. 7. The study is not exempt from limitations of Sharpe Treynor and Jenson measure. 8. Unique risk is completely ignored in all the measure.


The period of study for the purpose of analysis has been taken from 15TH December 2008 TO 3rd February 09


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