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  • 1. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836 A STUDY ON PERFORMANCE EVALUATION OF PUBLIC & PRIVATE SECTOR MUTUAL FUNDS IN INDIA MRS. P ALEKHYA* *Assistant Professor, Department of MBA, CMR College of Engineering and Technology, Hyderabad.ABSTRACTMutual fund provides a readymade option to households for portfolio diversification as well asrelative risk aversion through collecting and investing their savings in different risk-return profileinstruments. Its performance depends on the performance of underlying portfolio. If one or moreschemes perform badly in the portfolio, that can effect or hurt the investment decisions ofinvestors and may get them out from the scenario of wealth creation process. For savinginvestors’ money from such a hazard, it becomes necessary to evaluate the performance ofmutual fund portfolio so that investors can take/judge their investment decisions rationally. Thisevaluation would help in checking the prime idea of “putting all eggs in different baskets”behind mutual funds and guessing that how far this idea is doing well for investors. Therefore,our study has attempted to evaluate the comparative performance of public and private sectormutual fund schemes t he Indian Mutual fund Industry has witnessed a structural transformationduring the past few years. Therefore it becomes important to examine the performance of themutual fund in the changed environment. This paper has evaluated the performance of IndianMutual fund equity scheme of 3 years past data from 2009 to 2011.To examine the fundssensitivity to the market fluctuations in terms of beta. To appraise investment performance ofmutual funds with risk adjustment the theoretical parameters as suggested by Sharpe, Treynorand Jensen. To rank the funds according to Sharpes, Treynors and Jensons performance measure.KEYWORDS: mutual fund Performance, investment, risk-return Treynor Ratio, sharpe Ratio.______________________________________________________________________________ www.indianresearchjournals.comINTRODUCTIONThe financial system comprises of financial institutions, instruments and markets that provide aneffective payment and credit system that facility the channeling of funds from savers to theinvestors of the economy. Indian Mutual Funds have emerged as strong financial stability to thefinancial system. Mutual Funds have opened new vistas to investors and imported much neededliquidity to the system. Mutual Funds are dynamic financial institutions, which play a crucial role in an economyby mobilizing savings and investing in the capital markets savings and the investing in thecapital markets. Therefore, the activities of Mutual Funds have both short and long term impacton the savings and capital market and national economy. 147
  • 2. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836 Mutual Funds provide households an option for portfolio diversification and relative riskaversion through collection of funds from the households and makes investments in the stock andthe debt market.REVIEW OF LITERATUREBarua and Verma (1991) provided empirical evidence of equity mutual fund performance inIndia. They studied the investment performance of India’s first 7year close-end equity mutualfund, Master share. They found that the fund performed satisfactory for large investor in terms ofrate of return. Ippolito (1992) expressed that fund/scheme selection by investors is based on pastperformance of the funds and money flows into winning funds more rapidly than they flow outof losing funds. Sarkar and Majumdar (1995) evaluated financial performance of five close-ended growth funds for the period February 1991 to August 1993, concluded that theperformance was below average in terms of alpha values (all negative and statistically notsignificant) and funds possessed high risk.Jaydev (1996) evaluated performance of two schemes during the period, June 1992 to March1994 in terms of returns / benchmark comparison, diversification, selectivity and market timingskills. He concluded that the schemes failed to perform better than the market portfolio (ET’sordinary share price index). Gupta and Sehgal (1997) evaluated mutual fund performance over afour year period, 1992-96. The sample consisted of 80 mutual fund schemes. They concludedthat mutual fund industry performed well during the period of study. The performance wasevaluated in terms of benchmark comparison, performance from one period to the next and theirrisk-return characteristics.Mishra (2001) evaluated performance over a period, April 1992 to December 1996. The samplesize was 24 public sector sponsored mutual funds. The performance was evaluated in terms ofrate of return, Treynor, Sharpe and Jensen measures of performance. The study concluded dismalperformance of PSU mutual funds in India, in general, during the period, 1992-96.Zakri Y.Bello (2005) matched a sample of socially responsible stock mutual funds matched torandomly selected conventional funds of similar net assets to investigate differences incharacteristics of assets held, degree of portfolio diversification and variable effects ofdiversification on investment performance. The study found that socially responsible funds do www.indianresearchjournals.comnot differ significantly from conventional funds in terms of any of these attributes. Moreover, theeffect of diversification on investment performance is not different between the two groups. Bothgroups underperformed the Domini 400 Social Index and S & P 500 during the study period.Mayank V. Bhatt and Chetan C. Patel (2008) studied the performance comparison of differentmutual funds schemes in India through Sharpe index model and concluded that mutual funds arethe most popular and safe parameter for an investor to invest.Kavita Chavali and Shefali Jain (2009) evaluated the performance of equity linked savingsschemes and concluded that the fund chosen by the investor should match the risk appetite of theinvestor. Narayan Rao and M. Ravindran evaluated performance of Indian mutual funds in a bearmarket through relative performance index, risk-return analysis, Treynor ratio, Sharpe ratio, 148
  • 3. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836Jensen measure, and Fama’s measure. The results of performance measures suggested that mostof mutual fund schemes in the sample of 58 were able to satisfy investor’s expectations by givingexcess returns over expected returns based on both premium for systematic risk and total risk.Mutual Fund as an investment vehicle is capturing the attention of various segments of thesociety, like academicians, industrialists, financial intermediaries, investors and regulators.OBJECTIVES OF STUDYThe specific objectives of the study are as follows To analyze the trends in returns of selected mutual funds. To evaluate the performance of selected Public and Private sector Mutual Funds. To evaluate the performance of selected mutual funds by using Sharpe, Treynor and JensenRESEARCH METHODOLOGYSOURCE OF DATAThe data can be collected from Secondary Sources. The data was collected from Past Records,Books, Journals, Magazines, Internet and all other types of published data.STATISTICAL TOOLS The simple statistical techniques like percentages and growth rates are calculated. For thepurpose of evaluation the popular methods such as Sharpe, Treynor and Jensen are applied.DATA ANALYSIS AND INTERPRETATIONMEASURING MUTUAL FUNDS RETURNIn order to determine the risk adjusted returns of investing portfolio, several eminent authorshave worked since 1960’s to develop composite performance indices to evaluate a portfolio bycomparing alternative portfolio within a particular risk class. The most important and widely www.indianresearchjournals.comused measures of performance of Mutual Funds are:The one period rate of return, r, for a mutual fund may then be defined as the change in the perunit net asset value (NAV), plus it’s per unit cash disbursements (D) and per unit capital gainsdisbursements (C) such as bonus shares, it may be calculated as. Rap= (NAVt-NAVt-1) + DT + C NAVt-1 149
  • 4. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836Were 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 Ct = Capital gains disbursements per unit during the holding periodThis formula gives the holding period yield or rate of return earned on a mutual fund. This maybe expressed as a percentage.RISK ADJUSTED RETURNSTreynor’s index = (Rp – Rf) ÷ ßpWhere,Rp = Portfolio return over a periodRf = Risk-free return over a periodßp = Market-risk, beta coefficientHigher value of Treynor’s index indicates better performance of portfolio and vice versa. TheTreynor’s measure of portfolio performance is relative measure that ranks the funds in terms ofrisk (market risk) and return. The index is also termed as reward to volatility ratio.Sharpe’s index = (Rp – Rf) ÷ σpWhere,Rp = Portfolio return over a period www.indianresearchjournals.comRf = Risk-free return over a periodσp = Total risk, standard deviation of portfolio returnHigher value of Sharpe’s index indicates better performance of portfolio and vice versa. TheSharpe’s measure of portfolio performance is also relative measure that ranks the funds in termsof risk (total risk) and return. The ratio is also termed as reward to variability ratio.Jensens Measure is a risk-adjusted performance measure that represents the average return on aportfolio over and above that predicted by the capital asset pricing model (CAPM), given theportfolios beta and the average market return. This is the portfolios alpha. In fact, the concept issometimes referred to as "Jensens alpha." 150
  • 5. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836Jensen’s Measure is calculated as:αP = rP – [rf+ ßP( rm – rf) ]Where,rP = Expected total portfolio returnrf = Risk free rateßP = Beta of the portfoliorm = Expected market returnPERFORMANCE MEASUREMENT In this section, an attempt is made to measure the performance of selected mutual funds. For thispurpose the models developed by Sharpe, Trey nor and Jenseen were used. Before taking up this,the details about returns of selected funds are presented. In addition, to have an idea aboutvolatility of funds to market return, the Beta values and standard deviation values are calculated. TABLE 1.1: EQUITY FUND DIVIDENDSYear Percentage of return SBI UTI HDFC JM financial Market Index2009 9.70 6.65 13.25 4.18 9.602010 9.15 2.35 5.00 0.692 11.412011 12.93 10.70 8.70 11.40 10.10AVG 10.40 6.57 8.98 5.43 10.37 www.indianresearchjournals.comSource: www.mutualfundsindia.com, www.bseindia.comThe average return of SBI is 10.40% and highest is 12.93% and lowest is 9.15% it is concludedthat the return is increased trend.The return of UTI fund shows that it has earned highest return of 10.70 % on its investments inthe year 2011. It has, on an AVG generated a return of 6.57% for the period from 2009-2011. Average return of HDFC is 8.978% and the highest in 2009 is 13.25% and lowest is in 2010 isdecreased 5.00%.The return of JM financial fund shows that earned highest return of 11.40% on its investments in 151
  • 6. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836the year 2011. And lowest is in 2010 is decreased 0.692%. It has on AVG generated return of5.43%for the period from 2009-2011.Market return is in 2009 9.60% and in 2010 11.47% and in 2011 is 10.105%. So, it concludedthat market return also high in 2009 but it decreased in 2010 and increased in 2011.The average return of SBI is more than other mutual funds TABLE1.2: EQUITY FUND GROWTH Percentage of return Year SBI UTI HDFC JM financial Market Index2009 9.70 11.20 13.22 11.25 9.602010 10.83 3.33 5.10 10.05 11.412011 11.68 7.07 11.65 11.65 10.10AVG 10.73 7.20 9.99 10.98 10.37Source: www.mutualfundsindia.com , www.bseindia.comThe above table reveals that SBI made a highest return of 11.68% on its investment year2011.and lowest is in 2009 is decreased 9.70%. However it has earned on an average 10.73%return on investment for the period 2009- 11 The UTI fund made highest return of 11.20% on its investment in the year 2009 and lowestis in 2010 is decreased 3.33%.on an average the fund made a return 7.20% in period 2009-11. The return of HDFC fund also following this same trend. It has need highest return 13.22%and lowest is in 2010 is decreased 5.10%. The fund however average return of 9.99% duringperiod. The JM financial fund made a highest return of 11.65% on its investments in the year 2010 it www.indianresearchjournals.comhas also and lowest return of 10.05% in year 2010 on average return of 10.98% for the period2009-11. Market return fund also following same trend it has made highest return of 11.41% itinvestment in year 2010 and lowest return of 9.60% in year 2009. The fund hewer AVG return of10.37% during the period. The comparative analysis this four funds shows that JM finance fund made a highest averagereturn 10.98% and on its investment for the period 2009-11, followed by SBI and UTI andHDFC fund that order, 152
  • 7. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836 TABLE 1.3: BALANCED FUND DIVIDENDYears Percentage of return SBI UTI HDFC JM financial Market Index2009 6.3 8.93 -1.73 11.43 9.602010 8.13 19 3.375 5.65 11.412011 9.45 5.58 12.42 10.30 10.10AVG 7.98 11.17 4.69 9.13 10.37 Source : www.mutualfundsindia.com, www.bseindia.comFor the above can be concluded that SBI fund made highest return of 9.45% on it investment forthe year 2011 and lowest return of 6.30%, in 2009. However the fund made on an AVG 7.98%for period 2009-11, The return of UTI fund shows that it has earned a highest return of 19.00% on itsinvestment in year 2010 and lowest return of 5.58% in 2011. It has on an AVG a return of11.17% for period 2009-11. In this fund also the return of HDFC fund also following the same trend. It has madehighest return 12.42% on its investment in the year 2011. it has also incurred lose of 1.73%n inyear 2009. it has on an average generated a return of 4.69% for the period 2009-11. The return of JM finance fund show that has earned a highest return of 11.43% oninvestment in the year 2009 and lowest return of 5.65% in year 2010.the fund however AVG of9.13% during period. The return of market return fund also following the same trend it has made highest return www.indianresearchjournals.comof 10.41% and lowest return of 9.60% in year 2009.the fund however AVG of 10.37% duringperiod, the average return UTI more than other mutual funds. 153
  • 8. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836 TABLE 1.4: BALANCED FUND GROWTHYears Percentage of return SBI UTI HDFC JM financial Market Index2009 10.60 5.78 6.48 6.59 9.602010 7.78 5.85 6.43 9.55 11.412011 10.78 8.28 6.70 10.38 10.70AVG 9.74 6.64 6.53 8.84 10.37Source : www.mutualfundsindia.com , www.bseindia.comIts can observed from the above table that SBI fund made return of about 10.78%.on it’s investin the year 2011. It has lowest return of 7.78% in the year 2010. The fund also made an AVGreturn of about 9072 during period from 2009to 2011. The return of UTI fund show that it earned a highest return of 80.28% on its investments inthe year 2011and lowest return of 50.78% in 2009. It has on an average generated a return of6.64% for the period from 2009-11. The HDEFC fund has made a highest return of 6.70% on its investment for the year2011and lowest return of 6.43%in 2010.the fund made average return of 6.53% during theperiod. The JM financial fund has made a highest return of 10.38% on its investment for the year2011 and lowest return of 6.59%in 2009. Fund made an AVG return of 8.84% in the period from2009-2011. The average return of 10.37% market index more than other mutual funds. www.indianresearchjournals.com TABLE – 2: INDEX RETURNYear Absolute returns%2009 9.602010 11.412011 10.10AVG return 10.37 154
  • 9. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836Source: www.bseindia.com From the above table it can be noted that the index made highest of 11.41% for the year2010 index return also incurred a lowest of 9.60% in year 2009 an on average the index made a10.37%for the period 2009-11.TABLES OF STANDARD DEVIATION TABLE 3.1: EQUITY FUND DIVIDEND Fund name 3year Average Return Standard Deviation SBI 10.40 9.81 UTI 6.57 11.96 HDFC 8.98 11.32 JM financial 5.43 15.43 Market index 10.37 7.29Source: www.mutualfundsindia.com, www.bseindia.com From the above table present the average return and “ ” details. From the table it can beseen that SBI fund making highest average return of 10.4% during the period. However it’s alsofacing highest “ ” of 15.43 of all the four funds. The UTI fund and HDFC fund and JMfinancial funds both are making similar amount average return of about 10.37% but market indexis facing highest” ” of 7.29. TABLE 3.2: EQUITY FUND GROWTH Fund name 3year Average return Standard Deviation www.indianresearchjournals.com SBI 10.73 12.09 UTI 7.20 7.60 HDFC 9.99 11.56 JM financial 10.98 11.94Source: www.mutualfundsindia.com, www.bseindia.com 155
  • 10. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836 From the above value it can be concluded that compared with other funds JM financialfund making more returns and bearing risk of 11.94. Whereas SBI fund making 10.73% averagereturn with the” ” of 12.09. It has very low risk as compared to UTI fund and HDFC fund. TABLE3.3: BALANCED FUND DIVIDEND Fund name 3year Average return Standard Deviation SBI 7.98 9.39 UTI 11.17 17.98 HDFC 4.69 15.67 JM financial 9.136 7.95Source: www.mutualfundsindia.com , www.bseindia.com From the given values it is found that UTI fund is earning 11.17% AVG return with thehigher as compared to other funds. TABLE 3.4BALANCED FUND GROWTH Fund name 3years average return Standard Deviation SBI 9.72 8.68 UTI 6.64 6.75 HDFC 6.53 8.37 JM financial 8.84 8.45Source: www.mutualfundsindia.com , www.bseindia.com www.indianresearchjournals.com From the given values it is found that SBI fund is earning 9.72%AVGreturn with highest“ ” as compared to other funds.CONCEPT OF BETAThe beta for the overall market is equal to 1.00 and other betas are viewed in relation to thisvalue. Betas can be positive or negative. Many large brokerage firms, investment companies andfinancial consultants provide beta for large number of stocks. 156
  • 11. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836BETA CALCULATION NΣXY - ΣXΣYβ= NΣX2 – (Σ X)2WhereN = No of observationsΣX = Sum of X returns (Here X is market return)ΣY = Sum of Y returns (Here Y is a particular fund return)X2 =X*XΣXY = Sum of X * YCALCULATION OF BETA TABLE 4.1: EQUITY FUND DIVIDEND Fund name X Y XY X2 SBI 127.1 124.48 1738.00 2501.63 0.36 UTI 78.8 124.48 1051.18 2234.50 0.14 HDFC 107.80 124.48 1473.95 2508.06 0..23 JM financial 65.07 124.48 1024.17 3211.26 0.17 www.indianresearchjournals.comSource: www.mutualfundsindia.com , www.bseindia.comIt is observed from the above table that SBI fund responding to the market rate by 0.36 timeswhereas UTI fund is responding only 0.14 times to the market return. The SBI fund is morevolatile than UTI and HDFC and JM financial funds. 157
  • 12. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836 TABLE4.2: EQUITY FUND GROWTHFund name x y xy x2SBI 128.8 124.48 1967.85 3138.60 0.38UTI 86.38 124.48 884.38 1315.77 -0.016HDFC 119.90 124.48 1276.2 2691.89 0.112JM financial 132.10 124.48 1753.21 3165.69 0.22Source: www.mutualfundsindia.com , www.bseindia.comIt is seen form the table that SBI fund, HDFC fund and JM financial more than one times ofmarket return whereas UTI fund responding only -0.016 times. TABLE 4.3: BALANCED FUND DIVIDENDFund Name x y xy x2SBI 95.60 124.48 1219.06 1820.56 0.21UTI 111.20 124.48 1230.01 4912.77 0.019HDFC 56.30 124.48 1194.68 3211.23 0.21JM financial 111.20 124.48 1230.01 4912.77 0.22Source: www.mutualfundsindia.com , www.bseindia.com Above table from it can be concluded that that the SBI fund and HDFC fund and JMfinancial fund are responding more than one time of market return. Whereas UTI fundresponding only 0.019 tunes. TABLE 4.4 BALANCED FUND DIVIDEND www.indianresearchjournals.comFund Name x y xy x2SBI 116.60 124.48 1634.31 2038.36 0.45UTI 79.60 124.48 1115.59 1075.92 0.53HDFC 78.40 124.48 1332.85 1353.71 0.61JM financial 106.06 124.48 1412.33 1795.29 0.36Source: www.mutualfundsindia.com, www.bseindia.com 158
  • 13. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836 From the above table it can be concluded that the SBI fund, UTI fund and HDFC fund areresponding more than times of market return. Whereas JM financial fund responding only 0.36times.SHARPE MEASUREMENT RATIO TABLES TABLE 5.1: EQUITY FUND DIVIDENDFund Name Rp Rf p Sharpe Ratio RankSBI 10.59 6.50 9.81 0.416 IUTI 6.59 6.50 11.98 0.007 IIIHDFC 8.98 6.50 11.32 0.219 IIJM financial 5.42 6.50 15.43 -0.0069 IVMarket Index 10.38 6.50 7.29 0.532 -Source: www.mutualfundsindia.com, www.bseindia.comThe table shows that SBI fund as per Sharpe measurement is ranked one whereas HDFC fundgetting IInd rank. The UTI fund getting IIIrd rank. JM financial getting IVth rank in the Sharpeevaluation. As compared a market index SBI fund is earning good return and UTI fund is gettingbetter returns where as HDFC fund is better return where JM financial fund is getting whereasreturns. TABLE 5.2: EQUITY FUND GROWTHFund Name Rp Rf p Sharpe Ratio Rank www.indianresearchjournals.comSBI 10.73 6.50 12.09 0.34 IUTI 7.19 6.50 7.60 0.090 IVHDFC 9.99 6.50 11.56 0.301 IIIJM financial 11.00 6.50 11.94 0.376 IISource: www.mutualfundsindia.com www.bseindia.com 159
  • 14. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836As per sharpe measurement, SBI fund is ranked Ist, JM financial fund is ranked IInd and HDFCfund is III ranked, and UTI fund is IVth ranked. By comparing with market return all the fundsare getting low return TABLE 5.3: BALANCED FUND DIVIDENDFund Name Rp Rf p Sharpe Ratio RankSBI 7.96 6.50 9.39 0.155 IIUTI 9.26 6.50 17.90 0.154 IIIHDFC 4.69 6.50 15.67 -0.115 IVJM financial 9.12 6.50 7.95 0.329 ISource: www.mutualfundsindia.com , www.bseindia.comAccording sharpe model, JM financial fund is placed First ranked SBI fund and UTI fund sharpeIIIrd and IInd ranked, HDFC fund is placed IVth ranks respectively company with market returnall the funds one performing well. TABLE 5.4: BALANCED FUND GROWTHFund Name Rp Rf p Sharpe Ratio RankSBI 9.71 6.50 8.68 0.369 IUTI 6.63 6.50 6.75 0.019 IIIHDFC 6.52 6.50 8.37 0.003 IVJM financial 8.88 6.50 8.45 0.281 II www.indianresearchjournals.comSource: www.mutualfundsindia.com , www.bseindia.com According sharpe model, SBI fund is placed first rank JM financial and UTI fund shareIIIrd and IInd rank HDFC fund is placed IVth ranked. Respectively comparing with marketreturn all fund are performing well. By comparing all the four schemes i.e. SBI, UTI, and HDFC and fund it can be foundthat the balanced fund growth is getting good return than the any schemes the balanced dividendscheme is bearing more risk them the any other schemes 160
  • 15. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836TREYNOR MEASUREMENT RATIO TABLES TABLE 6.1: EQUITY FUND DIVIDENDFund Name Rp Rf p Trey nor Rank RatioSBI 10.59 6.50 0.36 14.13 IUTI 6.59 6.50 0.14 0.642 IIIHDFC 8.99 6.50 0.23 10.78 IIJM financial 5.42 6.50 0.17 -69.352 IVMarket 10.38 6.50 1 3.88 -IndexSource: www.mutualfundsindia.com, www.bseindia.comAbove table reveals that SBI fund ranked first in terms of making returns whereas IInd rankshared by HDFC fund and IIIrd rank by UTI fund and the IVth rank JM financial in terms ofmaking return of in relating to market returns.Comparing with the market return again SBI fund is getting good returns. UTI fund is earnedbetter returns, whereas HDFC fund is earned better returns JM financial fund is not makingsufficient. TABLE 6.2: EQUITY FUND GROWTHFund Name Rp Rf p Trey nor Rank RatioSBI 10.73 6.50 0.38 11.13 I www.indianresearchjournals.comUTI 7.19 6.50 0.016 -43.12 IVHDFC 9.99 6.50 0.42 10.78 IIJM financial 11.00 6.50 0.22 -6.352 IIISource: www.mutualfundsindia.com, www.bseindia.comFrom the given table it is observed that SBI fund is ranked First, HDFC fund and JM financialfund are ranked IIIrd and IInd and UTI fund is ranked IVth respectively. When compared withmarket return all the funds are not getting sufficient returns 161
  • 16. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836 TABLE 6.3 BALANCED FUND DIVIDENDSFund Name Rp Rf p Trey nor Rank RatioSBI 7.96 6.50 0.21 6.952 IIIUTI 9.26 6.50 0.019 145.26 IHDFC 4.69 6.50 0.21 -8.61 IVJM financial 9.12 6.50 0.22 11.90 IISource: www.mutualfundsindia.com : www.bseindia.comObserving given table it is known that UTI fund is ranked First JM financial fund IInd SBI fundis IIIrd and HDFC fund is IVth comparing with market return all the funds are not gettingsufficient returns. TABLE 6.4 BALANCED FUND GROWTHFund Name Rp Rf p Trey nor Rank RatioSBI 9.71 6.50 0.415 7.33 IUTI 6.63 6.50 0.53 0.245 IIIHDFC 6.53 6.50 0.37 0.081 IVJM financial 8.88 6.50 0.36 6.611 IISource: www.mutualfundsindia.com www.bseindia.com www.indianresearchjournals.com From the given it is observed that SBI fund is ranked First JM financial and UTI fund areranked IIIrd and IInd and HDFC fund IVth respectively comparing with market return all thefund are making good return.According to Treynor measurement also balanced fund growth scheme is performing well ascompared to the market return and balanced growth fund is not performing of the bench marketi.e., Market return. 162
  • 17. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836JENSEN PERFORMANCE MEASUREMENT RATIO TABLE TABLE 7.1: EQUITY FUND DIVIDEND Fund Name Rm Rf βp Rp Rp αp Jp RankSBI 10.37 6.50 0.36 10.40 26.54 -16.41- -44.83 IUTI 10.37 6.50 0.14 6.57 25.70 -19.13 136.64 IVHDFC 10.37 6.50 0.23 8.98 -25.78 -169.80 -73.14 IIJM financial 10.37 6.50 0.17. 5.43 25.81 -20.38 -119.8 IIISource: www.mutualfundsindia.com www.bseindia.com As per Jensen performance measurement the SBI fund ranked First getting a negative figure of -44.83 which is an indication that the management has used greater skills in managing theinvestment. Whereas HDFC ranked IInd getting a positive figure of -73.14 which is moderatelyperforming. However the UTI fund is performing negatively, the management of UTI fund failedto manage the investment effectively. Table 7.2 Equity Fund Growth Fund Name Rm Rf βp Rp Rp αp Jp RankSBI 10.37 6.50 0.38 10.73 26.62 -15.89 -41.81 IVUTI 10.37 6.50 -0.016 7.20 25.09 -17.89 111.12 IHDFC 10.37 6.50 0.42 9.92 26.78 -16.86 -40.14 III www.indianresearchjournals.comJM financial 10.37 6.50 0.22 10.98 26.00 -15.02 -6.83 IISource: www.mutualfundsindia.com www.bseindia.com According to Jensen model all the funds are failed to earn up to the mark returns. The UTI Fundranked first getting a figure of 0(approx), which is an indication that the management has did notuse great skills in managing the portfolio.From the given that observed UTI ranked First. Whereas JM financial Fund is ranked Second bygetting a negative figure of less than 1. However the UTI fund is performing negatively, themanagement of UTI fund failed to manage the portfolio effectively 163
  • 18. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836 TABLE 7.3: BALANCED FUND DIVIDENDS Fund Name Rm Rf βp Rp Rp αp Jp RankSBI 10.37 6.50 0.21 7.99 25.97 -17.99 -85.66 IIUTI 10.37 6.50 0.019 11.17 25.22 -14.05 -739.47 IVHDFC 10.37 6.50 0.21 4.69 25.97 -21.28 -101.33 IIIJM financial 10.37 6.50 0.22 9.23 26.00 -16.87 -76.68 ISource: www.mutualfundsindia.com : www.bseindia.com According to Jensen model all the funds are failed to earn up to the mark returns. Ascompared to other funds UTI fund performing with worst return of –739.47. On the basis of theabove presentation, it can be found that the MNC industry is facing a problem, so all the fundsare not getting sufficient returns. TABLE 7.4: BALANCED FUND GROWTH Fund Name Rm Rf βp Rp Rp αp Jp RankSBI 10.37 6.50 0.45 9.72 26.89 -17.17 -38.15 IIIUTI 10.37 6.50 0.53 6.64 27.20 -20.56 -38.79 IIHDFC 10.37 6.50 8.37 6.53 57.54 -51.01 -6.09 IJM financial 10.37 6.50 0.36 8.84 26.54 -17.70 -49.16 IVSource: www.mutualfundsindia.com : www.bseindia.com According to Jensen model all the funds are failed to earn up to the mark returns. The www.indianresearchjournals.comHDFC Fund ranked first getting a figure of 0(approx), which is an indication that themanagement has did not use great skills in managing the portfolio. Whereas HDFC Fund is ranked second by getting a negative figure of less than 1.However the HDFC fund is performing negatively, the management of HDFC fund failed tomanage the portfolio effectively.CONCLUSION It is hopeful that this study creates awareness that the mutual funds are worth investmentpractice. The various schemes of mutual funds provide the investors with a wide range of 164
  • 19. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836investments options according to his risk bearing capacities and interest. Besides they also give ahandy return to the investors. The paper analyses various schemes of Different Companies. In India Mutual funds are playing important role. The mutual fund Companies pool thesavings of small investors and invest those collected huge amount of funds in different sectors ofthe economy. They are performing like intermediary between small investor and the Indiancapital market. In recent years many mutual fund companies are established. Through thiscompetition is increased among the companies. To encounter the competition the differentcompanies are introducing different types of mutual fund schemes with attractive returns and lowrisk. So it is an advantage to the investors, For taking a decision to invest in mutual funds, the evaluation plays a greater role. Therankings given to the mutual funds attract the investment by the investors to the respective funds.For the purpose of ranking the performance of various mutual funds the methods such as Sharpe.Trey nor and Jensen were applied to the various funds in different schemes. It is hoped that theranks provided for the fund in this chapter explains relative performance of the schemes. Therelative performance of different types of funds according to different types of performancemeasurements are explained in the next page.FINDINGSAccording to Sharpe Measurement the following are the conclusion:EQUITY FUND DIVIDEND SCHEME The SBI Fund, as per Sharpe measurement is ranked one. Whereas HDFC Fund gotsecond rank. The SBI Fund is got third rank whereas JM financial fund got fourth rank.EQUITY FUND GROWTH SCHEME UTI Fund is placed first rank, JM financial Fund and HDFC Fund share second and thirdranks respectively and SBI IVth rank. Comparing with market return all Funds is very lowreturns. www.indianresearchjournals.comBALANCED FUND DIVIDEND As per Sharpe measurement, JM financial fund is ranked One, SBI fund is ranked twoand UTI fund is ranked Three and HDFC fund Forth rank. By comparing with market return allthe funds are getting very low returns.BALANCED FUND GROWTH According to Sharpe model SBI fund is placed first ranked, JM financial fund and UTIfund share Second and Third ranks and HDFC Forth rank respectively. Comparing with marketreturn all the funds are very low. 165
  • 20. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836 By comparing al the schemes .i.e., SBI, UTI and HDFC, JM financial funds that the allscheme is troubling more than the all schemes.ACCORDING TO TREYNOR MEASUREMENT:EQUITY FUND DIVIDEND SCHEME The SBI Fund, as per neither trey nor measurement is ranked one. Whereas HDFC Fundgot second rank. The UTI Fund is getting third rank and JM financial fund is Forth rank. As compared to market index SBI, UTI and HDFC Fund is earning very low returns andSBI Fund is getting better returns whereas JM financial Fund is getting worst returnsEQUITY FUND GROWTH SCHEME SBI Fund is placed first rank, JM financial Fund and HDFC Fund share third and secondranks respectively and UTI IVth rank. Comparing with market return SBI, HDFC fund areperforming well. Whereas UTI and JM financial funds have very low returns.BALANCED FUND DIVIDEND SCHEME As per Treynor measurement, UTI fund is ranked One, JM financial fund is ranked Twoand SBI fund is ranked Three and HDFC fund Forth rank. By comparing with market return allthe funds are getting good returns, except HDFC, BALANCED FUND GROWTH SCHEME According to Treynor model SBI fund is placed First ranked, JM financial fund and UTIfund share Second and Third ranks and HDFC Forth rank respectively. Comparing with marketreturn all the funds are performing well. By comparing al the schemes .i.e., SBI, UTI and HDFC, JM financial funds that the allscheme is troubling more than the all schemes.ACCORDING TO JENSEN MEASUREMENT THE FOLLOWING ARE THEFINDINGS www.indianresearchjournals.comEQUITY FUND DIVIDEND SCHEME The SBI Fund, as per neither treynor measurement is ranked one. Whereas HDFC Fundgetting second rank. The JM financial Fund is getting third rank and UTI fund is Forth rank. As compared to market index SBI,UTI and HDFC Fund and JM financial all the fundsare getting low returns. 166
  • 21. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836EQUITY FUND GROWTH SCHEME UTI Fund is placed first rank, JM financial Fund and HDFC Fund share third and secondranks respectively and SBI IVth rank. Comparing with market return UTI fund are performingwell. Whereas SBI, HDFC and JM financial fund are very low returnsBALANCED FUND DIVIDEND As per Jenson measurement, JM financial fund is ranked One, SBI fund is ranked Twoand HDFC fund is ranked Three and UTI fund Forth rank. By comparing with market return allthe funds are getting very low return.BALANCED FUND GROWTH According to Terynor model SBI fund is placed First ranked, JM financial fund and UTIfund share Second and Third ranks and HDFC Forth rank respectively. Comparing with marketreturn all the funds are performing well. By comparing al the schemes .i.e., SBI, UTI and HDFC, JM financial funds that the allscheme is troubling more than the all schemes.BIBLIOGRAPHYBOOKS 1. Nataragan and Gordan “Financial Services and Markets” 2. Ponithavatih Pandian “Security Analysis and Portfolio -Management” 3. Preeti Singh “InvestmentManagemet“SecurityAnalysis and -Portfolio Management . www.indianresearchjournals.com 4. S. Kevin “Security Analysis and Portfolio Management” Prentice- Hall of -India PVT LTD (Edition 2003) 5. Donald E. Fisher, Ronald J. Jordan “Security Analysis and Portfolio-Management”NEWS PAPERS The Economic Times Business line 167
  • 22. IRJCAsia Pacific Journal of Marketing & Management ReviewVol.1 No. 2, October 2012, ISSN 2319-2836MAGAZINES Business World India TodayWEBSITES www.mutualfundindia.com www.indiamart.com www.indiainfoline.com www.bseindia.com www.sbhindia.com www.indianresearchjournals.com 168