3rdsem Project

“A STUDY ON PERFORMANCE EVALUATION OF OPEN-ENDED
EQUITY MUTUAL FUND SCHEMES OF INDIAN BANKING SECTOR IN

INDIA”
CHAPTER – 1
INTRODUCTION
SVRCCMS/GK/KLS Page 1
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INTRODUCTION
1.1 Finance
Finance is the key important role in any enterprises/organizations. It is one of the basic foundations
for all the activities in an organization. Without finance there is no business. Finance is a process
of arranging the funds to the needed expenditure. Maintaining finance in an organization is very
important. Planning, analyzing and managing are the key roles in finance.
1.2 Financial management
Financial management arose as an unmistakable field of study at the hour of the twentieth century.
Whenever one goes through the historical backdrop of financial administration obviously inside the
past the extent of money related administration has been restricted to specific exercises, with
consideration mostly on specific long winded occasions like the development of capital, significant
extension, consolidation, acknowledgment, and liquidation inside the existence pattern of a firm.
Financial management is unmistakable and institutional in nature. Inside the past, more noteworthy
accentuation was given on everyday issues looked by Financial managers who were mindful only
of keeping up with monetary records, getting ready reports on the company’s status, execution, and
orchestrating reserves required by the corporate. Their exceptional administrations were used
provided that required by means of, an issue with the deficiency of assets and to the obtainment of
extra assets.
Driven by the developing pattern of globalization, the progressive advancements in data innovation,
and the rise of the computerized time, one can observe exceptional changes inside the universe of
money. Today current money is changing from homegrown financing to multi-cash subsidizing.
Monetary control is changing from straightforward bookkeeping to coordinated control frameworks
that help venture asset arranging.
Venture the board is moving from basic value and obligation items to complex subordinates items
like choices, prospects, and trades. Monetary administrations like banking and protection have
prepared for virtual conveyance in an exceptionally consistent advanced world. These broad
advancements inside the universe of money play reclassified the part of monetary supervisors. The
life partner manager’s, accordingly worried about all monetary exercises of planning of raising
money, designation, and controlling yet not with simply any of them also, he has handle such
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monetary issues that are experienced by a firm at the hour of fuse, liquidation ,
solidification ,acknowledgment and in this manner the like circumstances that happen habitually.
The money administrators of today are called upon to advance monetary techniques that dovetail
with the company's cutthroat business methodologies. In an incredibly cutthroat climate, admittance
to the savviest assets could be a vital component of seriousness. A money chief should assess his
association's money needs and judge, for example whether to utilize obligation or value
subsidizing, whether to possess fixed or drifting obligation, whether to acquire in rupees or in
unfamiliar cash, whether to attempt to do money and/or premium trades to downsize its financing
cost, whether to give GDR‟S (Global Depository Receipts) ADR‟s (American Depository
Receipts) or to go for an area auxiliary issue then on. For each other option or blend of choices, he
needs to assess his net expenses, the peril in question, timing issues, etc. For this finance supervisor
ought to have an insightful twisted of brain and education in different monetary ideas
SPECIFIC AREA OF THE TOPIC CHOSEN
1.3 MUTUAL FUND
A Mutual Fund is an increasing scenario in the world as well as in India. Normally common people
will save their money by depositing in a bank or giving personal loan to others but the return on
these was very low. So people are choosing the schemes which they can generate income with their
savings. Due to their low rate of savings the common people cannot invest in the secondary market
which needs huge investment and risk in the secondary market is also high. Mutual fund is one of
the schemes which provide return on income with less risk.
1.3.1 MEANING
A mutual fund may be a trust that pools the reserve funds of varied financial backers who share a
typical monetary objective. The cash consequently gathered is then put into capital market
instruments like offers, debentures and different protections. The pay procured through these
ventures and therefore the capital appreciation acknowledged is shared by its unit holders
with relation to the number of units possessed by them.
A common asset is an expertly overseen type of aggregate speculations that pools cash from
numerous financial backers and puts it in stocks, securities, transient currency market instruments,
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and additionally different protections. In a common asset, the asset administrator, who is otherwise
called the portfolio director, exchanges the asset's basic protections, acknowledging capital
additions or misfortunes, and gathers the profit or interest pay. The ventures are then given to the
singular financial backers. The worth of a portion of the common asset, known as the net resource
esteem per share (NAV) is determined day to day based on the complete worth of the asset isolated
by the quantity of offers presently given and extraordinary.
A mutual fund may be a speculation apparatus that allows little financial backers admittance to a

really much broadened arrangement of values, securities and different protections. Every investor
takes an interest within the increase or loss of the asset. Units are given and might be reclaimed on
a case by case basis. The assets Net Asset esteem (NAV) is resolved each day.
Interests in securities are spread across a wide cross-segment of ventures and areas and in this way
the risk is diminished. Diversification reduces the risk since all stocks may not move in a similar
course to a similar extent simultaneously. Shared reserves issue units to the financial backers as per
the quantum of cash contributed by them. Financial backers of common assets are known as unit
holders.
At the point when a financial backer buys in for the units of a shared asset, he turns out to be part
proprietor of the resources of the asset to a similar extent as his commitment sum set up with the
corpus (the aggregate sum of the asset). A Mutual Fund financial backer is otherwise called a
common asset investor or a unit holder. Any change in the worth of the speculations made into
capital market instruments, (for example, shares, debentures and so on) is reflected in the Net Asset
Value (NAV) of the plan. NAV is characterized as the market worth of the Mutual Fund plan's
resources net of its liabilities. NAV of a plan is determined by isolating the market worth of the
plan's resources by the absolute number of units given to the financial backers.
1.3.2 Definition of Mutual Fund
According to the SEBI (MF) Regulations, 1993, "An asset laid out as a trust by a support to raise
monies by the legal administrators through the offer of units to people in general under at least one
plan for putting resources into protections as per these guidelines.
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1.4 VALUATION OF MUTUAL FUND
The net asset value of the Fund is the combined market worth of the resources fund net of its
liabilities. All in all, assuming the fund is broken up or exchanged, by auctioning off every one of
the resources in the Fund, this is the sum that the investors would by and large claim. This brings
about the idea of net resource esteem per unit, which is the worth, addressed by the responsibility
for the unit in the fund. It is determined just by partitioning the net resource worth of the fund by
the quantity of units. Notwithstanding, a great many people allude freely to the NAV per unit as
NAV, overlooking the "per unit".
1.4.1 Calculation of NAV
The most important a part of the calculation is that the valuation of the assets owned by the Fund.
Once it's calculated, the NAV is just the web value of assets divided by the amount of units
outstanding. The detailed methodology for the calculation of the online asset value is given
below. The web asset value is that the actual value of a unit on any business day. NAV is that
the barometer of the performance of the scheme. The web asset value is that the value of the assets
of the scheme minus its liabilities and expenses. Per unit of NAV is that the net asset value of the
scheme divided by the quantity of the units outstanding on the valuation date.
1.5 Mutual Fund Structure in India:
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● Sponsor: Sponsor is essentially a promoter of the fund. for instance Bank of Baroda,

Punjab full service bank, depository financial institution of Indi and insurance Corporation
of India (LIC) are the sponsors of UTI Mutual Funds. Development Finance Corporation
Limited (HDFC) and Standard Life Investments Limited are the sponsors of HDFC mutual
funds. The fund sponsor raises money from the general public, who become fund
shareholders. The pooled money is invested within the securities. Sponsor appoints
trustees.
● Trustees: Two third of the trustees are independent professionals who own the fund and
supervise the activities of the AMC. it's the authority to sack AMC employees for non-
adherence to the principles of the regulator. It safeguards the interests of the
investors. They’re legally appointed i.e. approved by SEBI.
● AMC: Asset Management Company (AMC) could be a set of economic professionals who

manage the fund. It takes decisions on when and where to take a position the money. It
doesn’t own the money. AMC is just a fee-for-service provider.
The above 3 tier structure of Indian mutual funds is incredibly strong and virtually no
chance for fraud.
 Custodian: A Custodian keeps safe custody of the investments (related documents of

securities invested). A custodian should be a registered entity with SEBI. If the promoter
holds 50% voting rights within the custodian company it can’t be appointed as custodian
for the fund. This can be to avoid the influence of the promoter on the custodian. It’s going
to also provide fund accounting services and agency services. JP Morgan Chase is one in
every of the leading custodians.
 Agencies: Transfer Agent Company interfaces with the shoppers, issues a fund’s units,
helps investors while redeeming units. Provides balance statements and fund performance
fact sheets to the investor.
1.6 Flow of operation
A fund may be a trust that pools the savings of variety of investors who share a standard financial
goal. The cash thus collected is then invested in capital market instruments like shares, debentures
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and other securities. The income earned through these investments and therefore the capital
appreciation realized is shared by its unit holders in proportion to the amount of units owned by
them. Thus a investment company is that the most fitted investment for the person because
it offers a chance to take a position in a very diversified, professionally managed basket of
securities at a comparatively low cost. The flowchart below describes broadly the working of
an open-end investment company.
1.7 Advantages of Mutual Fund
● Liquidity: Mutual Funds are relatively easier to buy and except close ended Mutual
Funds. We can sell open ended equity mutual fund units when the stock market is
high and make a profit and can purchase mutual fund units when the stock market is
low.
● Diversification: equity mutual funds have their portion of risk as their presentation
depends on the securities exchange development. Consequently reserve directors
spread the investor speculation across loads of organizations across different ventures
and various areas called expansion. in this manner when one resource class doesn't
play out the other area can repay to keep away from misfortune for financial backers.
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● Expert management: A mutual fund is really great for investors who don't have the
opportunity or abilities to do the exploration and resource allotment. An asset
supervisor deals with it and settles on choices on how to manage the investors's
investment. The fund manager and the group of specialists settle on the proper
protections, for example, Equity, Debt or a blend of both relying upon the venture
objective of the asset. Besides the fund manager additionally settles on how lengthy to
hold a protections.
● Low Cost: When Mutual Funds are paid in bulk or large quantities the cost of those
Mutual Funds will be less as compared to buying one Mutual Fund. as processing
fees and other Commission charges will be lower when purchased in a bulk quantity
rather than purchasing a single per fund.
● Easy to invest: The investment in mutual funds is very easy as compared to the
capital market. There are several types of mutual funds available in India catering to
investors across all walks of life. Mutual Funds are flexible for any income earning
persons. It is easy to find a mutual fund that matches their income.
● Quick and hassle free process: The mutual fund is easier to select from handpicked
funds that match the investor investment objectives and risk tolerance. tracking
Mutual funds will be a hassle-free process.
● Tax saving: Investing in mutual funds will help to reduce the tax under section 80c of
Income Tax Act 1961. There are few types of mutual funds which will save tax like
ELSS, Long term capital gain etc.
● Safety: Normally people believe that Mutual Funds are not safe as compared to the
bank products. This is not true as Mutual Funds are purely controlled or under the
statutory government bodies like SEBI and AMFI. Any investor can easily verify the
credentials of the fund house and the Asset Manager from SEBI. They also have an
impartial grievance redressed platform that works in the interest of investors.
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1.8 Disadvantages of Mutual Fund
 Costs of managing the mutual fund: The salary of the analyst and fund manager
comes from the investors together with the operational cost of the fund. Total fund
management charges are one among the primary parameters to think about when
choosing a investment firm. Higher management fees to not guarantee better fund
performance.
 Exit load: Exit load are going to be applicable to investment firms as fees charged by
Asset Management companies when exiting a mutual fund. it discourages investors
from redeeming investment for a few time. It also helps the fund manager garner the
specified funds to get the suitable securities at the correct price and time.
 Dilution: While diversification averages investor risk of loss it may tell you

investor’s profits. Hence, investors shouldn't invest in many mutual funds at a time.
1.9 Theories of Mutual funds
A large number of studies on the growth and financial performance of mutual funds have been
carried out during the past, in the developed and developing countries. Brief reviews of the
following research works reveal the wealth of contributions towards the performance evaluation
of mutual funds, market timing and stock selection abilities of fund managers.
● Sharpe (1966) introduced the measure to evaluate the mutual funds risk-adjusted
performance. The measure was known as reward-to-variability ratio (Currently Sharpe
Ratio). With the help of this ratio he evaluated the return of 34 open-end mutual funds in
the period 1945-1963. The results showed the capital market was extremely efficient due
to which the majority of the sample had lower performance as compared to the Dow Jones
Index.
● Michael C. Jensen (1967) derived a risk-adjusted measure of portfolio performance

(Jensen's Alpha) that estimates how much a manager‘s forecasting ability contributes to a
fund's returns. As indicated by Statman (2000), the e SDAR of a fund portfolio is the
excess return of the portfolio over the return of the benchmark index, where the portfolio
is leveraged to have the benchmark index‘s standard deviation.
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● Black et al. (2006) examined customer‘s choice of financial services distribution

channels. They showed that customer confidence, lifestyle factors, motivations &
emotional responses influence the customer‘s choice, while product, Channel &
organizational factors such as image and reputation are also significant.
● Syama Sunder (1998) conducted a survey to get an insight into the MF operations of
private institutions with special reference to Kothari pioneers. The survey revealed that the
awareness MF concept was poor during that time in small cities like Visakhapatnam.
Agents play a vital role in spreading the MF culture; open end schemes were much
preferred then; age and income are two important determinants in the selection of fund
/scheme; brand image and return are their prime considerations.
1.10 TYPES OF MUTUAL FUNDS/ SCHEMES
There are many Mutual Funds or schemes available in India. Some of those types are discussed
below:
1. By Structure :
There are three primary structures of mutual funds in India. That explained briefly
below;
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a. Open ended schemes/funds: An open ended fund or scheme is one that is

available for subscription and repurchase on a continuous basis. These
schemes do not have a fixed maturity period. Investors can conveniently buy
and sell units at Net Asset Value (NAV) related prices which are declared on a
daily basis. The key future of an open ended scheme is liquidity.
b. Close ended scheme/funds: A closed ended fund or scheme has a stipulated
maturity period. For example 1 to 2 years the fund is open for subscription
only during a specified period at the time of launch of the scheme i.e.., initial
public offering. Investors can invest in the scheme at the time of initial public
issue and thereafter they can buy or sell the units of the scheme on the stock
exchanges where the units are listed. In order to provide an exit route to the
investor some close ended funds were given an option of selling back the units
to the mutual fund and NAV related prices. SEBI regulations stipulate that at
least one of the two existing roots is provided to the investor that is either a
repurchase facility or through listing on stock exchanges. These mutual fund
schemes disclose NAV generally on a weekly basis.
c. Interval scheme/fund: Interval funds or scheme is a kind of mutual fund in
which the unit can be purchased and sold only at a predetermined time
interval. For example every 15 days or any other time period as specified by
the fund house. All the interval funds can invest in debt and equity; it is
usually invested in debt securities only.
2. By Investment objective:
The Schemes can be categorized by their investment like growth schemes, Income
schemes, balance schemes or money market schemes. Such schemes may be open
ended or closed ended schemes as described earlier. There are classified as:
● Growth or equity oriented scheme: The aim of Growth Fund is to provide

capital appreciation over the medium to long-term. Such schemes normally
invest a major part of their corpus in equities. Such funds have comparatively
high risk. The schemes provide different options to the investors like dividend
option, capital appreciation and many more. The investor may choose an
option depending on their performance. The investors must indicate the option
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in the application form. The mutual fund also allowed the investor to change
the option at a later date. Growth schemes are good for investors having a
long-term outlook seeking appreciation over a period of time.
● Income or debt oriented schemes: The aim of an income fund is to provide
regular and study income to investors. Such schemes generally invest in fixed
income securities such as the bonds, corporate debentures, government
securities and money market instruments. Such funds are less risky compared
to equity schemes. These funds are not affected because of fluctuation in the
equity market. However, opportunities of capital appreciation are also limited
in such funds. The NAV of such funds are affected because of the change in
interest rate in the country. if the interest falls and NAV of such funds are
likely to increase in the short run and vice-versa. However long-term investors
may not bother about the fluctuations.
● Balance schemes: The aim of a balanced fund is to provide both growth and
regular income as such schemes invest both in equity and fixed income
securities in the proportion indicated in their offer document. These are
appropriate for the investors looking for moderate growth. They generally
invest 40% to 60% in equity and debt instruments. These funds are also
affected because of fluctuations in the share prices in the stock market.
However, NAV of such funds are likely to be less volatile compared to pure
equity funds
● Money market or liquid funds: These funds are income funds and their aim
is to provide easy liquidity preservation of capital and moderate income
schemes. These schemes invest exclusively in safer short-term instruments
such as Treasury bill, certificates of deposit. Commercial paper, interbank
calls money & government securities. Return on the schemes fluctuates much
less compared to other funds. The funds are appropriate for corporate and
individual investors as a means to park their surplus funds for short periods.
3. By Nature :
The investment in mutual funds can be an equity fund, debt fund or combination of
both equity and debt fund.
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● Equity fund: Equity funds are considered to be more risky funds as compared to
other fund types but they also provide higher returns than other funds. It is advisable
that an investor looking to invest in an equity fund should invest for a long term that
is more than for three years. There are different types of equity funds each falling into
different risk brackets in the order of decreasing risk level. The following are the
types of equity funds:
a. Growth funds - Growth funds to invest for capital appreciation but they are
different from aggressive growth funds in the sense that they invest in
companies that are expected to outperform the market in the future. Without
entirely adapting speculative strategies Growth Fund invest in those
companies that are expected to post above average earnings in the future
b. Sector funds - equity funds that invest in a particular sector or industry of the
market are known as sector funds. The exposure of the fund is limited to a
particular sector like Information Technology, banking sector,
Pharmaceuticals etc.
c. Midcap or small cap funds - that invest in companies having lower market
capitalization than large capitalization companies are called midcap or small
cap funds. market capitalization of Mid Cap companies is less than that of big,
blue chip companies that is less than rupees 2500 crore but more than rupees
500 Cross. And small cap companies have market capitalization of less than
rupees 500 crores. Market capitalization of a company can be calculated by
multiplying the market price of the company share by the total number of its
outstanding shares in the market. The shares of Mid Cap or small cap
companies are not as liquid as of a large cap company which gives rise to
volatility in share prices of these companies and consequently investment gets
risky.
d. Equity linked savings scheme - These funds are well diversified and reduce
sector specific or company specific risk. However like all other Funds
diversified the equity funds are exposed to equity market risk. One prominent
type of diversified equity fund in India is equity linked savings scheme
(ELSS) investors are eligible to claim deduction from taxable income up to
rupees 1 lakh.
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e. Dividend Yield fund - The objective of equity income or dividend yield

equity fund is to generate high recurring income and study capital appreciation
for investors by investing in those companies which issue high dividends.
Equity income or dividend yield equity funds or generally exposed to the
lowest risk level as compared to other equity funds.
f. Gold fund - The objective of this fund is accumulating the money at the gold
rate according to the units held by investors. This is one of the new funds
introduced. Here all the investors will invest for the pool account of the mutual
fund and that amount is invested in the gold and according to the fluctuation of
the rate of gold in the market fund managers invest when rates are in good rate
like this profit earned from this gold fund is distributed according to the unit
held by the investors.
● Debt fund : Funds that invest in medium to long-term debt instruments issued by
private companies, banks, Financial Institutions, Government and other entities
belonging to various sectors like infrastructure companies are known as debt or
income funds. Debt funds are low risk profile funds that seek to generate fixed current
income to investors. In order to ensure regular income to investors, debt or income
funds distribute a large fraction of their supplies to investors. Although that securities
are generally less risky than equity as they are subject to credit risk by the issuer at the
time of interest or principal payment. based on different investment objective there
can be following types of debt funds:
i. Diversified Debt fund - Debt funds that invest in all securities issued
by entities belonging to all sectors of the market are known as
diversified debt funds. The best feature of diversified debt fund
investments are properly diversifying into all sectors which result in
risk reduction. Any loss incurred on account of default by a Debt issuer
shared by all investors which further reduces risk for an individual
investor.
ii. High yield debt funds - Understand the risk of default is present in all
debt funds and therefore debt funds generally try to minimize the risk
of default by investing in securities issued by only those borrowers
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who are considered to be of “investment grade.” but high yield debt

funds adopt a different strategy and the preferred securities issued by
those issuers who are considered to be of “below investment grade”.
The motive behind adopting the short-term risky strategy is to earn
higher interest returns from this issuer. These funds are more volatile
and bear high default risk although they may earn at times higher
returns for investors.
iii. Assured Return Funds -Although it is not necessary that a fund will
meet its objectives or provide assured returns to investors, but there
can be funds that come with a lock-in period and offer assurance of
annual returns to investors during the lock-in period. Any shortfall in
returns is suffered by the sponsors or the Asset Management
Companies (AMCs). These funds are generally debt funds and provide
investors with a low-risk investment opportunity.
iv. Fixed Term Plan Series - Fixed Term Plan Series usually are closed-
end schemes having short-term maturity period (of less than one year)
that offer a series of plans and issue units to investors at regular
intervals. Unlike closed-end funds, fixed term plans are not listed on
the exchanges. Fixed term plan series usually invest in debt / income
schemes and target short-term investors. The objective of fixed term
plan schemes is to gratify investors by generating some expected
returns in a short period.
● Balanced Fund - A balanced fund is one that has a portfolio comprising debt
instruments, convertible securities, and Preference equity shares. Their assets are
generally held in more or less equal proportions between debt/money market
securities and equities. By investing in a mix of this nature, balanced funds seek to
attain the objectives of income, moderate capital appreciation and preservation of
capital, and are ideal for investors with a conservative and long-term orientation.
4. Other Schemes: There are many other schemes in mutual funds; three of them will
be discussed below.
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● Tax Saving Scheme: Tax saving Mutual Funds or schemes are just like other
Mutual Funds with an added tax saving benefit. The special feature of this
type of mutual fund is the investment made in the tax saving mutual funds is
eligible for the tax benefit under section 80C of Income Tax Act 1942.
● Index Schemes: An index fund is a portfolio of stock or bonds designed to

mimic the composition and performance of a financial market index. Index
funds have lower expenses and fees than actively managed funds. Index funds
follow a passive investment strategy.
● Sector Specific Scheme: Mutual funds which invest in a particular sector or

industry are said to be sector specific funds or schemes. Since the portfolio of
such mutual funds consists mainly of investment in one particular type of
sector, they offer a smaller amount of diversification and are considered to be
risky.
1.11 History of Mutual Fund
In 1774, a Dutch merchant invited subscriptions from investors to set up an investment trust by the
name of Eendragt Maakt Magt (translated into English, it means, ‘Unity Creates Strength’), with
the objective of providing diversification at low cost to small investors. Its success caught on, and
more investment trust were launched, with verbose and quirky names that when translated
read ‘profitable and prudent’ or small maters grow by consent. The foreign and colonial
Govt. A trust, formed in London in 1868, promised ‘start’ the investor of modest means the same
advantages as the large capitalist by spreading the investment over a number of stocks.
When three Boston securities executives pooled their money together in 1924 to create the first
mutual fund, they had no idea how popular mutual funds would become. The idea of pooling
money together for investing purposes started in Europe in the mid-1800s. The first pooled fund in
the U.S. was created in 1893 for the faculty and staff of Harvard University. On March 21st, 1924
the first official mutual fund was born. It was called the Massachusetts Investors Trust.
After one year, the Massachusetts Investors Trust grew from $50,000 in assets in 1924 to
$392,000 in assets (with around 200 shareholders). In contrast, there are over 10,000 Mutual Funds
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in the U.S. today totaling around $7 trillion (with approximately 83 million individual investors)
according to the Investment Company Institute.
1.12 HISTORY OF MUTUAL FUNDS IN INDIA
❖ The Evolution:
The formation of Unit Trust of India marked the evolution

of the Indian mutual fund industry in 1963. The primary
objective at that time was to attract the small investors and it
was made possible through the collective efforts of the
Government of India and the Reserve Bank of India. The
history of mutual fund industry in India can be better understood divided into
following phases
❖ Phase I. Establishment and Growth of Unit Trust of India - 1964-87:
Unit Trust of India enjoyed complete monopoly when it was established in the year 1963
by an Act of Parliament. UTI was set up by the Reserve Bank of India and it continued to
operate under the regulatory control of the RBI until the two were de-linked in
1978 and the entire control was transferred in the hands of Industrial Development
Bank of India (IDBI). UTI launched its first scheme in 1964, named as Unit Scheme
1964 (US-64), which attracted the largest number of investors in any single investment
scheme over the years. UTI launched more innovative schemes in the 1970s and 80s to
suit the needs of different investors. It launched ULIP in 1971, six more schemes between
1981-84, Children's Gift Growth Fund and India Fund (India's first offshore fund) in
1986, Mastershare (India‘s first equity diversified scheme) in 1987 and Monthly
Income Schemes (offering assured returns) during the 1990s. By the end of 1987, UTI's
assets under management grew ten times to Rs 6700 crores.
❖ Phase II. Entry of Public Sector Funds - 1987-1993:
The Indian mutual fund industry witnessed a number of public sector players entering the
market in the year 1987. In November 1987, SBI Mutual Fund from the State Bank of
India became the first non-UTI mutual fund in India. SBI Mutual Fund was later followed
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by Can bank Mutual fund, LIC Mutual Fund, Indian Bank Mutual Fund, Bank of India
Mutual Fund, GIC Mutual Fund and PNB Mutual Fund. By 1993, the assets under
management of the industry increased seven times to Rs. 47,004 crores. However, UTI
remained to be the leader with about 80% market share.
❖ Phase III. Emergence of Private Sector Funds - 1993-96:
The permission given to private sector funds including foreign fund management
companies (most of them entering through joint ventures with Indian promoters) to enter
the mutual fund industry in 1993, provided a wide range of choice to investors and
more competition in the industry. Private funds introduced innovative products,
investment techniques and investor-servicing technology. By 1994-95, about 11 private
sector funds had launched their schemes.
❖ Phase IV. Growth and SEBI Regulation - 1996-2004:
The mutual fund industry witnessed robust growth and stricter regulation from the SEBI
after the year 1996. The mobilization of funds and the number of players operating in the
industry reached new heights as investors started showing more interest in mutual funds.
Investor‘s' interests were safeguarded by SEBI and the Government offered tax benefits to
the investors in order to encourage them. SEBI (Mutual Funds) Regulations, 1996 was
introduced by SEBI that set uniform standards for all mutual funds in India. The
Union Budget in 1999 exempted all dividend incomes in the hands of investors
from income tax. Various Investor Awareness Programs were launched during this
phase, both by SEBI and AMFI, with an objective to educate investors and make them
informed about the mutual fund industry.
In February 2003, the UTI Act was repealed and UTI was stripped of its Special legal
status as a trust formed by an Act of Parliament. The primary objective behind this was to
bring all mutual fund players on the same level.
UTI was re-organized into two parts:
1. The Specified Undertaking.

2. The UTI Mutual Fund.
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Presently Unit Trust of India operates under the name of UTI Mutual Fund and its past
schemes (like US-64, Assured Return Schemes) are being gradually wound up. However,
UTI Mutual Fund is still the largest player in the industry.
❖ Phase V. Growth and Consolidation - 2004 Onwards:
India boasts of a total 44 Mutual Funds as of today. With the permission from the RBI,
fund houses have opened up and investors can now invest in foreign markets like the
United States. And with such positive development, the asset classes today have also
moved on from just equity and debt to gold funds, Inflation funds and more innovative
funds like arbitrage funds.
The industry has now entered the phase of consolidation and growth with recent mergers
among different private sector fund houses. A takeover of Lotus India Mutual
Fund(LIMF) by Religare Mutual Fund in 2009 is one of the major consolidations in the
modern era of the Mutual Fund industry in India. Morgan Stanley chose to hand over its
Mutual Fund schemes to HDFC Asset Management Company in late 2013. It was widely
regarded as a welcome move as it helped HDFC expand its user base. Another noticeable
merger was announced on March 22nd, 2016 as Edelweiss Asset Management (EAML)
declared the purchase of domestic assets of JP Morgan Asset Management India
(JPMAM). The combined AUM of both the companies is estimated to be approximately
around INR 8,757 crores. Last year, Goldman Sachs Mutual Fund handed over its assets to
Reliance Capital Asset Management Company, which were initially taken over from
Benchmark AMC. ING Investment Management sold its Mutual Fund business to Birla
Sun Life Asset Management. Hence, over the last couple of years, the industry has seen a
degree of consolidation taking place.
The Mutual fund business is a highly untapped market as 74% of the asset under
management (AUM) comes from the country’s top five cities. Also, with such large and
noticeable mergers, there has been consolidation in the Mutual Fund industry. SEBI also
has come up with various initiatives including investor awareness as well as trying to
expand reach beyond the top 15 cities. With various investor-friendly initiatives, the
industry assets under management or AUM have seen a rise over the years. With
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increasing Income, urbanization of the population, ever increasing reach via technology,
better connectivity, the Mutual Funds industry is in for a bright future.
Presently India has 170 passive mutual fund schemes.
(Source – AMFI)
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CHAPTER – 2
REVIEW OF LITERATURE AND RESEARCH DESIGN
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REVIEW OF LITERATURE AND RESEARCH DESIGN
2.1 Review of Literature
Performance evaluation of mutual funds is one of the preferred areas of research where a
good amount of study has been carried out. The area of research provides diverse views of
the same.
Dr. S.M. Tariq Zafar, Dr. D. S. Chaubey, Syed Imran Nawab Ali, (2020), This paper
gives an exact review expressing the positioning and assessment of assets in light of three
proportions to be specific, Jensen’s, Treynor's and Sharpe's. It presumes that a mutual fund is
a special monetary instrument particularly for beginners who have least risk craving and will
keep on being a remarkable financial tool because of its benefits like proficient
administration, expansion, financial aspects of scale, liquidity, straightforwardness for certain
disadvantages like expenses, weakening, and charges.
Dr. Shri Prakash Soni, Dr. Deepali G. Bankapure & Dr. Mahesh Bhutada, (2015),
comparative analysis of mutual fund schemes, accessible at Kotak mutual fund and HDFC
mutual fund. The review presumed that Kotak Mutual Fund plans are more damaging in
Large Cap Equity plans and HDFC Mutual Fund plans are more disastrous in Mid Cap
Equity plans, while both the organizations’ plans are very much overseen in the obligation
market. Kotak Select Focus is the best plan in Large cap Equity, HDFC.
Rajput and Singh, (2014), made an attempt to assess the venture execution of major funds,
as far as risk and return and to focus on the effect of securities market fluctuations, during
April 2012 to March 2013. The sample comprises 120 different open-ended open-end
fund schemes from public area monetary foundations, banks, private area associations
and unit investment trust of India. The 100 share based BSE national index has been used as a
proxy to search out out the performance of the schemes within the market The review
uncovered that assessment saving subsidies performed well within the market with high
varieties in chance and return.. Systematic risk and variability were higher in tax saving and
equity schemes whereas risk was moderate under balanced and low in income schemes. Tax
saving fund outperformed compared with market benchmark followed by balanced fund and
equity fund.
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Ms. Shilpi Pal and Arti Chandani, (2014), in their review inspected the exhibition of the
couple of pay and obligation shared reserve plot, based on their everyday NAVs. from the
period Oct 2007 to Oct 2012.The investigation discovers that, the best plan were HDFC Mid
Cap Opportunity, Birla Sun Life MNC Fund and Quantum Long-Term Equity.
Dr. S. Narayan Rao, (2013), Assessed the exhibition of Indian mutual fund schemes in a
bear market utilizing relative execution record, risk return analysis, Trainers ratio, Sharpe
ratio, Jensen's action, Fama's measure. The review observes the Medium Term Debt Funds
were the best performing assets during the bear time of September 98 to April 2002 and 58 of
269 Open Ended Mutual Funds gave preferable returns over the general market returns.
M S Annapoorna and K. Gupta, (2013), in their review analyzed the exhibition of mutual
fund schemes, ranked 1 by CRISIL and contrasted these profits and SBI domestic term
deposit rates and viewed that as a large portion of the mutual fund schemes have neglected to
give SBI domestic term deposit.
Mallikarjun.R, and Ranjeetha.R, (2013), Analyze the risk adjusted performance of selected
balanced mutual fund schemes in India. a total of 10 schemes offered by various Mutual
Funds were selected and studied for Risk and returns parameters. The evaluation included
Sharpe ratio, trainer’s ratio, Jensen's alpha and famas measure. The results provide that
various schemes did not outperform in the market. The mutual funds were found to possess
low average beta, disproportionate unsystematic risk, mismatch of the risk and return
relationship.
Nimalathasan and Gandhi, (2012), focused on the financial performance analysis of

mutual fund schemes (equity diversified schemes and equity mid-cap schemes) of
selected banks (State Bank of India, Canara Bank-Public Bank, ICICI Bank, HDFC
Bank-Private Bank) with the objectives of analyzing the financial performance of selected
mutual fund schemes through the statistical parameters (Standard Deviation, Beta and
Alpha) and ratio analysis i.e. Sharpe Ratio, Treynor’s Ratio, Jenson Ratio, Information Ratio
Dr S.M. Tariq Zafar, Dr Adeel Maqbool & Mr. S.M. Khalid, (2012), examined the
investment performance of Indian Mutual Funds with respect to the three performance
evaluation measures, the proper balance between selectivity and diversification has not been
maintained. This is due to the fund manager’s poor investment planning of the funds.
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Kalpesh P Prajapati and Mahesh K Patel, (2012), in their study evaluated the performance
of various diversified equity mutual funds in India, from the period 2007 to 2011 and found
that overall mutual funds have given positive returns and the best performers are HDFC and
Reliance mutual fund.
Jayant R Kale and Venkatesh Panchapagesan, (2012), examines the reasons for the poor
penetration of the mutual funds industry and point out that absence of feeble administrative
climate and administration is the premier explanation, for the terrible showing is the
justification for the poor development and execution of mutual funds
Stephen J Brown, (2012), concluded that there is no underlying mechanism for driving
prices, which can be used to infer some new information; it also provides information about
the hypothesis which fails in providing a benchmark for detecting the formation of bubbles
and when it might collapse.
Mohit Gupta & Navdeep Agarwal, (2009), found very little research on the construction of
the best mutual fund portfolio. Their target of the exploration was to build the best portfolio
utilizing a bunch strategy, accepting industry fixation as a variable and looking at the
exhibition of two kinds of portfolios with chosen benchmarks. Results are viewed as
empowering, taking everything into account. The outcomes are relied upon to help in the
development of the best arrangement of mutual funds.
R.H. Prasath, (2009), Emphasizes the core values of mutual fund investment, benefits of
mutual funds and types of mutual funds and before choosing the mutual fund schemes, the
investor should undergo fact sheet thoroughly and he has to choose the best one by
calculating Sharpe Ratio, Treynor's Ratio, Jensen Ratio, IR Ratio and NAV calculation.
Concluded that Open ended mutual funds have provided better returns than others and some
of the funds provided excess returns over expected returns based on both premium for
systematic risk and total risk.
Aymen Karoui, and Iwan Meier, (2008), concentrated on the exhibition and portfolio
qualities of 828 recently sent off U.S. mutual fund schemes throughout the time-frame 1991-
2005 utilizing the Carhart (1997) 4-factor resource estimating model. Their review uncovered
new U.S. value shared reserves that beat their companions by 0.12% each month over the
initial three years. Notwithstanding, there were particular examples in this prevalent gamble
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changed execution assessed utilizing Carhart's (1997) 4-factor model. The quantity of assets
that began to beat more seasoned reserves contracted significantly following one to three
years. These outcomes recommended that at first great execution was somewhat because of
hazard taking and not really unrivalled supervisor ability. Examining the profits additionally
affirmed that the profits of the asset began to display better quality deviations and higher
unsystematic risk that could not be explained by the risk exposure to the four factors of the
Car hart model.
Deepak Agrawal, (2007), examined the Indian Mutual Fund Industry evaluating system with
experimental examinations on its valuation. It additionally dissected information at both the
fund manager and fund investor levels. It expressed that mispricing of the Mutual assets
could be assessed by contrasting the profit from market and return on stock. During the
valuing time frame, on the off chance that the profit from stock is negative, it demonstrates
overpricing and assuming positive shows under evaluating. Relative execution estimation
was utilized to quantify the presentation of the MF with SENSEX and it utilized Standard
Deviation, Correlation examination, Coefficient of Determination and Null Hypothesis. This
study uncovered that standard deviations of the 3-month returns were critical with the
expansion in the period. The Standard Deviation increment showed higher deviations from
the genuine means. The change and coefficient of variety (COV) were likewise critical.
Change expansions in the later periods showed higher changeability in the profits. As the
time skyline expanded COV diminished suggesting values are less steady when contrasted
with little span of speculations.
Manoj Jhanwar, Sanjay Sehgal, (2007), aimed to evaluate if mutual fund managers exhibit
persistently superior stock selection skills over a short-horizon of one year using risk-adjusted
abnormal returns (RAR), One-factor capital asset pricing model or CAPM three-factor,
Fama’s-French model, Four-factor Carhart model. Their study demonstrated that short-term
persistence in equity mutual funds performance does not necessarily imply superior stock
selection skills. Common factors in stock returns explained some of the abnormal returns in
top ranking mutual fund schemes. Only the winner portfolios sorted on four-factor alphas'
provided an annual abnormal return of about 10% on post-formation basis using daily data.
The short-term persistence results were much better when daily data was used rather than
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monthly observations, thus implying that data frequency does affect inferences about fund
performance.
Ashok Banerjee, Soumya Guha Deb and B.B Chakrabarti, (2007), They used Return
Based Style Analysis (RBSA) to evaluate Equity Mutual Funds in India using quadratic
optimization of an asset class factor model proposed by William Sharpe and analysis of the
relative performance of the funds with respect to their style Benchmarks. Their study found
that the mutual fund generated positive monthly returns on the average during the study
period of January 2000 - June 2005. The ELSS fund lagged the growth of funds or all funds
taken together, with respect to returns generated. The mean return of the growth funds or all
funds was not only positive but also significant. The ELSS funds also demonstrated
marginally higher volatility (standard deviation) than the growth funds
Sharad Panwar and R Madhumathi, (2006), identified the difference in characteristics of

public sector sponsored and private sector sponsored Mutual Funds, found the extent of
diversification in portfolio of securities of public sector and private sectors sponsored mutual
funds and compare the performance of public sector sponsored and private-sector sponsored
Mutual Funds using traditional investment measures. the primarily use Jensen alpha, Sharp
information ratio, excess standard deviation adjusted return (eSDAR) and find out that
portfolio risk characteristics measured through private sector Indian sponsored Mutual Funds
seems to have outperformed both public sector and private sector foreign sponsored mutual
funds and the general linear model of analysis of covariance establishes differences in
performance among the three classes of mutual funds in terms of portfolio diversification.
D.N.Rao, (2006), aimed at analyzing performance of select open-ended equity mutual funds
using Sharpe Ratio, Hypothesis testing and return based on yield. The most important finding
of the study had been that only four Growth plans and one Dividend plan (5 out of the 42
plans studied) could generate higher returns than that of the market which is contrary to the
general opinion prevailing in the Indian mutual fund market. Even the Sharpe ratios of
Growth plans and the corresponding Dividend plans stand testimony to the relatively better
performance of Growth plans. The statistical tests in terms of F-test and t-Test further
corroborate the significant performance differences between the Growth plans and Dividend
plans.
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Kaushik Bhattacharjee and Prof. Bijan Roy, (2006), evaluated whether or not the selected
mutual funds were able to outperform the market on the average over the studied time period.
In addition to that by examining the strength of interrelationships of values of PCMs for
successive time periods , the study also tried to infer about the extent to which the future
values of fund performance were related to its past by using a single index model. The study
revealed that there were positive signals of information asymmetry in the market with mutual
fund managers having superior information about the returns of stocks as a whole. PCM also
indicated that on an average mutual funds provided excess (above-average) return, but only
when the unit of time period was longer (1 qtr or 4 qtr). Therefore, they concluded that for
assessing the true performance of a particular mutual fund, a longer time horizon is better.
D.N.Rao, (2006), talked about a 4-step model for selecting the right equity fund and
illustrated the same in the context of equity mutual funds in Saudi Arabia.
The 4 step model was as follows:
1. Compare returns across funds within the same category.

2. Compare fund returns with the returns of benchmark index.
3. Compare against the fund’s own performance.
4. Risk-related parameters: as indicated by the Standard Deviation (SD) and risk-
adjusted returns as calculated by the Sharpe Ratio (SR).
The study revealed that most of the funds invested in Arab stocks had been in existence for
less than a year and the volatility of the GCC stock markets contributed to the relatively poor
performance of these funds and the turnaround of these funds could take place only with the
rallying of GCC and other Arab markets. Out of the six categories of equity mutual funds in
Saudi Arabia discussed above, Funds invested in Asian and European stocks were more
consistent in their performance and yielded relatively higher returns than other categories,
though funds invested in Saudi stocks yielded higher 3-year returns. Given the future outlook
of Asian economies, particularly China and India and the newly emerging economies such as
Brazil and Russia, funds invested in the stocks of these countries are likely to continue their
current performance in the near future.
Miguel A. Ferreira, António F. Miguel, Annel Keswani, & Sofia Brito Ramos, (2006),
studied the performance of mutual funds around the world using a sample of 10,568 open-end
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actively managed equity funds from 19 countries using different models, mainly, domestic
market model, international market model, Carhart (1997) domestic four-factor model,
Carhart (1997) international four-factor model. With the help of this research they came to a
conclusion that the funds size was positively related with fund performance. Larger funds
performed better suggesting the presence of significant economies of scale in the mutual fund
industry worldwide. This conclusion is consistent among domestic and foreign funds, and in
several other robustness tests. Fund age is negatively related with fund performance
indicating that younger funds tend to perform better. This finding seemed mainly driven by
the samples of foreign and U.S. funds. When investing abroad, young mutual funds seemed
to offer investors higher returns.
Juan Carlos, (2005),analyzed whether it was more appropriate to apply a factor-based or a

characteristic-based model - both known as benchmarks in portfolio performance
measurement using the Linear model, asset pricing model and Fama’s and French factors.
The study showed that if information on returns was used and a linear model was proposed
that adjusted return to a set of exogenous variables, then the right side of the equation
reported the achieved performance and the passive benchmark that replicated the style or risk
of the assessed portfolio. While, a factor model utilizes a replicate benchmark with short
positions implicitly symmetrical to the long positions. Performance of Russell indexes was
analyzed by applying various factor models, constructed from the indexes themselves, and
other models that use the indexes directly as benchmarks; the presence of biases was
detected. Therefore, according to the empirical findings, selection of exogenous variables that
define the replicate benchmark would appear to be more relevant than the type of model
applied.
Stefan Engstrom, (2004), provided extensive evidence on portfolio characteristics of mutual

funds and studied the relation between fund performance and the fund manager's investment
strategy using both the traditional unconditional alpha model, as in Jensen (1968), and the
conditional alpha, following Ferson and Schadt (1996). The study showed that a weak
negative relation exists between performance and past stock returns in the portfolio. Investing
in value stocks could help to improve overall performance. It also showed that mutual funds
with a more diversified portfolio performed somewhat better than funds with a less
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diversified portfolio. However, diversification could be achieved by extending the funds'

investment universe and investing in non-listed stocks.
Dr. Naliniprava Tripathy, (2004), this paper has examined the investment performance of
Indian mutual funds in terms of six performance measures. The results indicate that the fund
managers under study have not been successful in reaping returns in excess of the market or
in ensuring an efficient diversification of Portfolio. It found that proper balance between
selectivity and diversification is not maintained. This is due to the fund manager’s acumen of
selectivity and poor investment planning of the fund.
R. Nithya, (2004), Examined that the values of mutual funds to the target people by
identifying Asset Management Company that is performing well and identifying the top
schemes in the category such as equity, balanced, Monthly Income Plan (MIP) & Income in
the Asset Management Company (AMC), and it performed well and met the expectations.
Bijan Roy & Saikat Sovan Deb,(2003), examined the effect of incorporating lagged
information variables into the evaluation of mutual fund managers’ performance in Indian
context with the monthly data for 89 Indian mutual fund schemes using Treynor’s - Mazuy
Model, Merton-Henriksson Model. The study revealed the use of conditioning lagged
information variables causing the alphas to shift towards the right and reducing the number of
negative timing coefficients, though it could not be concluded that alphas of the conditional
model were better compared to its unconditional counterpart as they were not found to be
statistically significant. The noticeably different results of the unconditional timing models
vis-à-vis conditional timing models testified superiority of the model
Dr.S. Anand and Dr. V. Murugaiah,(2003), indicates that the majority of schemes showed
underperformance in comparison with risk free return".
Olaf Grewe and Richard Stehle, (2001), examined the risk adjusted performance of open
ended mutual funds which invest mainly in German stocks using Jenson’s measure and
Sharpe’s measure. The study finds out that the rates of return of the mutual funds and the rate
of return of the chosen benchmark both must include identical return components. either both
must include dividends or exclude them. The performance estimates are not very sensitive
with respect to the benchmark choice. When we look at the investment strategy in which the
investment in a specific fund has the same risk as the chosen benchmark, the average
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underperformance is small when we weight the individual fund returns equally. The average
performance is neutral, when we weight the individual fund returns according to fund size,
measured by assets under management.
Sudhir Nanda, Parvez Ahmed, Partha Gangopadhyay, (2001), examined the performance
of equity and bond mutual funds that invested primarily in the emerging markets using
Treynor’s ratio, Sharpe’s ratio, Jensen’s measure. With this research they found that on an
average the U.S. stock market outperformed emerging equity markets but the emerging
market bonds outperformed U.S. bonds. They also found that overall emerging market stock
funds under-performed the respective MSCI indexes. These were evident by their lower
return, higher risk, and thus lower Sharpe ratios.
Amitabh Gupta, (2000), has examined the investment performance of Indian mutual funds
in terms of 6 performance measures, using weekly NAV data for 73 mutual fund schemes
from 1994 – 1999. He found that the schemes have shown a mixed performance during the
period.
M. Vijay Anand,(2000), focused on the schemes of Birla Sun life and the competitor’s
schemes, available in the market. Author studied the analysis of Performance of Equity funds
for 3 years and SWOT Analysis of Birla Sun life by Literature survey and Delphi technique.
In depth financial review the author identifies among the selected equity funds that earn
higher returns than benchmark and competitors and concludes that Birla Sun life performs
well compared to the benchmarks and competitors.
S.P.Kothari, Jerold B. Warner, (1997), examined the empirical properties of performance

measures for mutual funds using Simulation procedures combined with random and random-
stratified samples of NYSE and AMEX securities and other performance measurement tools
employed are Sharpe measure, Jensen alpha, Treynor’s measure, appraisal ratio, and Fama’s-
French three-factor model alpha. The study revealed that standard mutual fund performance
was unreliable and could result in false inferences. In particular, it was easy to detect
abnormal performance and market-timing ability when none exists. The results also showed
that the range of measured performance was quite large even when true performance was
ordinary. This provided a benchmark to gauge mutual fund performance. Comparisons of
their numerical results with those reported in actual mutual fund studies raised the possibility
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that reported results were due to misspecification, rather than abnormal performance. Finally,
the results indicated that procedures based on the Fama’s-French 3-factor model were
somewhat better than CAPM based measures.
2.2 STATEMENT OF PROBLEM
In this present study analysis on Indian Mutual Fund Industry pricing mechanism with
empirical studies on its valuation. Its studies on the open- ended equity mutual funds of
selected banks perform and their risk and returns. This project also analyzes the performance
of open- ended equity mutual fund schemes under Assets under Management (AUM) of
selected mutual funds. Therefore, the present study makes an attempt to focus on this
important aspect.
2.3 SCOPE OF THE STUDY
Scope of the project research is listed below:
❖ The study has been limited to 5 banking mutual funds in India. They are :
1. HDFC Mutual Fund
2. IDBI Mutual Fund
3. Kotak Mahindra Mutual Fund
4. ICICI Prudential Mutual Fund
5. Axis Mutual Fund
❖ The selected scheme of Mutual Fund is Open-Ended Equity Scheme
❖ The type of category of Mutual Fund is
● Large Capital
● Mid Capital
● Small Capital
❖ The study of Project is limited to 5 years i.e., from 2016 - 2021.
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2.4 OBJECTIVES OF STUDY
The major objectives of the study are as follows:
● To know risk and return associated with the selected banking mutual funds in Open-
ended equity mutual funds schemes.
● To find out the performance of Open-end equity mutual funds in selected banking
mutual funds.
● To compare the performance among the selected banking mutual funds in Open-end
equity mutual funds schemes.
● To identify the suitable equity mutual funds among selected banking mutual funds of
Open-end equity mutual funds schemes.
2.5 RESEARCH METHODOLOGY
Research Methodology is a system or method that is used to distinguish, process, select and
analyze data about specific points. In a research study, the research methodology enables the
researcher to assess person research's legitimacy and help in concluding findings.
2.6 RESEARCH DESIGN
It is a framework of various research methods and numerous techniques chosen by a

researcher out of many options that are available for the purpose of research. The Research
design enables the researcher to select research methods that are more suitable for the subject
matter and set their research up for success. This research will also use various data collection
techniques that will provide meaningful information. The type of research is empirical in
Nature.
2.7 COLLECTION OF DATA
The data for this project report is collected from Secondary data sources. The secondary data
used to collect information of NAV of selected mutual fund schemes from the website of
www.amfiindia.com and economic times.
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2.8 SAMPLING DESIGN
I have collected data for the present study from five banking Mutual fund schemes of Indian
banking sector. Judgment sampling technique was used to analyze the data of the project
report.
2.9 SAMPLE SIZE
I have collected different types of mutual fund schemes of selected 5 mutual fund banks in
the Indian banking sector for a period of 5 years (2016-2021). The selected mutual fund
banks are HDFC mutual fund, ICICI prudential mutual fund, Axis mutual fund, IDBI mutual
fund and Kotak Mahindra mutual fund.
For the present study, the mutual funds of Open-ended equity mutual schemes of Large cap,
Mid cap, and Small cap have been selected.
2.10 STATISTICAL TOOLS OF DATA COLLECTION
To analyze the information in a project report the following statistical tools were used.
1. Standard Deviation - The Standard deviation evaluates the volatility of the fund. The
SD of a fund measures the risk by measuring the degree to which the fund fluctuates
in relation to an average return of the fund over a period of time.
SD =
√ ∑ (R- R)2
N
Where,
R, is fund returns R, is Average return N, is no of years
2. Beta (β) - Systematic risk is measured in terms of Beta, which represents fluctuations
in the NAV of the fund and market. The more responsive the NAV of a Mutual Fund
is to the changes in the market; higher will be its beta
nΣxy-(Σx)(Σy)
β = 2 2
nΣ x - (Σx)
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Where,
N = no of years; X = avg returns of market; Y = avg returns of portfolio.
3. Sharpe ratio - In this model, performance of a fund is evaluated on the basis of
Sharpe Ratio, which is a ratio of returns generated by the fund over and above risk
free rate of return and the total risk associated with it.
( Rp -Rf )
S=
σp
Where,
Rp = avg return on portfolio
Rf = risk free rate of return
4. Treynor's ratio - Treynor’s ratio is a measurement of the returns earned in excess of

what could have been earned on a riskless investment. Higher the Treynor’s Ratio is
meant the better portfolio.
Rp - Rf
T=
βp
Where,
T = Treynor’s ratio
R p = avg return on portfolio
R f = risk free rate of return
5. Jensen ratio - It measures the difference between market risk and actual performance
of the fund. Positive Jensen Ratio shows Superior
α p = r p [ r f + β p ( r m -r f ) ]
Where,
r p = expected total portfolio return
r f = Risk free rate
β p= Beta of Portfolio
r m = expected market return
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2.11 Plan of Analysis
The core of the research started with collection of raw data w.r.t NAV & historical data for
the NIFTY Total 100 Return index for large cap fund, NIFTY 150 Midcap Index for mid cap
fund and NIFTY Small cap 250 Index for the period of 2016 - 2021. The Interpretation and
analysis conducted through websites and articles collected from the data.
2.12 Limitations of the study:
● Since the funds selected for this study were open ended equity based growth Mutual
Funds. The fund composition kept on changing over the time period so it became
difficult to understand the fund properties as historical data pertaining to the fund
composition was not available.
● Because of unavailability of historical data and fund composition it was difficult to
ascertain the performance of the fund properties and a simple evaluation was done
against the market performance.
● Due to time constraint can be able to focus on other funds except open ended equity
Mutual Fund
● Due to time constraints only 5 years of data is collected on daily NAV basis
● In a limited time, only five selected banks from the private banking sector of India
have been selected.
● The information which is collected may not be accurate as it is secondary data.
2.13 CHAPTER SCHEME
CHAPTER-1: INTRODUCTION
CHAPTER-2: REVIEW OF LITERATURE AND RESEARCH DESIGN
CHAPTER-3: BANK SECTOR MUTUAL FUND COMPANY PROFILE
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CHAPTER-4: ANALYSIS AND INTERPRETATION OF THE DATA
CHAPTER-5: SUMMARY OF FINDINGS, CONCLUSION AND

SUGGESTIONS
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CHAPTER-3
BANK SECTOR MUTUAL FUND COMPANY PROFILE
BANK SECTOR MUTUAL FUND COMPANY PROFILE
3.1 Bank sector
For the present study, the five private banks from the Indian banking sector have been
selected. The following are those private banks selected for the project study.
1. HDFC Mutual Fund

2. IDBI Mutual Fund
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3. Kotak Mahindra Mutual Fund

4. ICICI Prudential Mutual Fund
5. Axis Mutual Fund
3.2 Mutual fund
Mutual funds are considered as one of the best available investment options as compared to
other investments. They are very cost effective and also easy to invest in the biggest
advantage of mutual funds is they provide diversification by reducing risk using Returns.
For the present study, Open-ended Equity Mutual Funds schemes have been selected.
3.3 Open-ended Equity Mutual Funds schemes
According to SEBI, an Open-ended Mutual Fund or scheme is one that is available for
purchase and subscription continuously. There is no time limit for purchasing and selling
Open-ended equity mutual funds schemes, that means an investor can purchase and sell the
mutual fund scheme at any point of time. Open ended equity Mutual Funds are also said to
be liquidity funds as they do not have any fixed maturity period they can be redeemed at any
point of time.
There are many types in open ended equity mutual fund schemes. For the present study only
few types of them are selected. They are;
1. Large Capital of Open-ended Equity scheme..

2. Mid Capital of Open-ended Equity scheme.
3. Small Capital of Open-ended Equity scheme.
3.4 HDFC MUTUAL FUND
HDFC Asset Management Company Ltd. or HDFC Mutual Fund is currently the largest
mutual fund and actively managed equity mutual fund in India. It is one of the most
profitable asset management companies (AMC) in the country. The company manages assets
worth Rs. 415566.10 crores as of March 31 2021.
In the last 5 years, the CAGR of:
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● Revenue from operators was 17.41%

● Operating profit was 20.08%
● Profit before tax was 21.35%
● Profit after tax was 21.07%
● Asset under management (AuM) was 25.86%
● Active equity AuM was 32.27%.
The company has around 210 branches located in more than 200 cities around India. It has 53
Lakh investors with 91 Lakh live accounts.
HDFC Asset Management Company Ltd. received approval to act as an AMC from SEBI
back 30 June 2000 under the registration number MF/044/00/6. It also offers portfolio
management/non-binding investment advisory services since 18 September 2016 under the
registration code PM/INP000000506 from SEBI.
Vision: To be the most respected Asset Manager in the world.
Mission: To be a wealth creator for every Indian.
Table 3.4.1 showing key information about HDFC Mutual Fund
Mutual fund HDFC Mutual Fund
Asset management HDFC Asset Management Company Ltd.

company
Founded 10 December 1999
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Incorporated 3 July 2000
Sponsors Housing Development Finance Corporation Ltd (HDFC Ltd)

Standard Life Investment Ltd
Trustee HDFC Trustee Company Limited
Mr. Anil Kumar Hirjee (Chairman)

Name of Trustees Mr. Ranjan Sanghi (Director)
Mr. V. Srinivasa Rangan (Director)
Mr. Vimal Bhandari (Director)
MD and CEO Mr. Milind Barve
CIO Mr. Prashant Jain
Investor Service Officer Mr. John Mathew
Compliance Officer Mr. Yezdi Khariwala
Table 3.4.2 showing selected list of HDFC Mutual Fund in India

Name of the HDFC Top 100 Fund HDFC Midcap HDFC Small Cap
scheme (HT 100 ) Opportunities Fund Fund
Category of Large-Cap Fund Mid Cap Fund Small Cap Fund
Scheme
Type of Scheme Open ended equity Open ended equity Open ended equity
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scheme scheme scheme

Launch date 19/08/1999 07/05/2007 11/02/2008
Investment To provide long - term To provide long-term To provide long-term
Objective capital appreciation by capital capital
investing appreciation/income appreciation/income
predominantly in by investing by investing
Large-Cap companies. predominantly in predominantly in
Mid-Cap companies. small-Cap & Mid-
Cap companies.
Benchmark NIFTY 100 Index NIFTY Mid-Cap 150 S&P BSE 250 Small
Index (Total Return Index) Index (Total Return Cap Index ( Total
Index) Return Index)
Minimum Rs. 5,000 Rs. 5,000 Rs. 5,000
Application
Amount
Scheme Options Growth option. Growth option. Growth option.
3.5 IDBI MUTUAL FUND
IDBI mutual fund is a subsidiary of IDBI Bank, a Financial Service Provider Catering to
customers looking for short and long term investment options. It manages assets worth Rs.
8949.06 Crore via debit liquid funds, ELSS, Domestic and overseas FoFs, and Multi Cap
Funds.
INDIA”
IDBI Mutual Fund has been recognized as one of the best performing investment schemes
currently available in the Indian financial market. Its primary products, equity, Debt, Gold
and hybrid funds, offer an annual return as high as 13.2% against the invested amount.
IDBI mutual fund employees over 200 people across 15 branches across the country. IDBI
asset managers Limited was incorporated in accordance with the Companies Act, 1956 And
IDBI mutual fund a subsidiary was set up with compliance of Indian Trust act of 1882.
About the Sponsor
Industrial Development Bank of India (IDBI) was incorporated under the government
company act on 1st July 1964. The primary aim of the bank was to provide financial support
to the feeble industrial landscape of the country at the time. In its initial days, IDBI was a
subsidiary of the RBI but they later transferred to the Government of India in 1976. The
government itself had to take control of the bank after mounting pressure from financial
circles. Currently LIC holds a 51% stake in the bank.
IDBI has one of the largest networks of branches and ATMs in the country owing to
government banking through the years. It now has 1891 branches spread across all states of
the country as well as the Overseas Branch in Dubai.
IDBI is unlike any other banking institution in the country as It helped shape the financial
sector especially during the pre liberalization era. it had a direct and pivotal role to play In
the formation of multiple National financial institution including National Stock Exchange of
India (NSEI ), Securities and exchange Board of India (SEBI), Stock Holding Corporation of
India Limited ( SHCIL|), and National securities depository Limited (NSDL) .
Vision: To be the most preferred and trusted bank enhancing value for all stakeholders.
INDIA”
Mission: To promote financial inclusion, by assisting the common man in making informed
investment choices, through mutual funds and thus bring to him, the prosperity of capital
markets.
Table 3.5.1 showing the key Information about IDBI Mutual Fund
Mutual Fund IDBI Mutual Fund
Founded March 29, 2010
Incorporated Jan 25, 2010
Sponsors IDBI Bank Limited
Trustee IDBI mutual fund Trustee Company Limited
MD and CEO Mr. Dilip Kuman Mandal
CIO Mr V Balasubramanian
investor service officer Mr Durga Prasad SV
compliance officer Mr Chandra Bhushan
Table 3.5.2 showing the selected list of IDBI Mutual Fund in India
Name of the IDBI India top 100 IDBI midcap fund IDBI small cap fund
scheme equity Fund
INDIA”
Category of Large cap fund midcap fund small cap fund

Scheme
Type of open ended equity open ended equity open ended equity
Scheme scheme scheme scheme
Launch date 25/04/2012 05/01/2017 01/06/2017
Investment To provide investors To provide investors To provide investors

Objective with the with the opportunities with the opportunities
opportunities for for long-term capital for long-term capital
long-term capital appreciation by appreciation by
appreciation by investing investing
investing predominantly in predominantly in
predominantly in equity and equity equity and equity
equity and equity related instruments of related instruments of
related instruments Mid cap companies Small cap companies
of large cap
companies
Benchmark NIFTY 100 Index NIFTY Mid-Cap 150 NIFTY 250 Small
Index (Total Return Index) Index (Total Return Cap Index ( Total
Index) Return Index)
Minimum Rs 5000 Rs 5000 Rs 5000

Application
Amount
Scheme Growth option. Growth option. Growth option.

Options
3.6 KOTAK MAHINDRA MUTUAL FUND
Kotak Mahindra Asset Management Company Limited (KMAMC) is a Public limited

company registered under the Companies Act 1956 on August 2 1994. The company is the
INDIA”
Asset manager of Kotak Mahindra Mutual Fund (KMMF) and wholly and a subsidiary of
Kotak Mahindra Bank Limited (KMBL).
Kotak mutual fund began its operations back in December 1998. It was the first AMC to
offer a dedicated gilt fund for investing solely in government securities. It provides mutual
fund and Portfolio Management Services under SEBI (Mutual funds) Regulations, 1996 and
SEBI (Portfolio manager) Regulations, 1993. KMAMC also offers pension fund management
services through its subsidiary, the Kotak Mahindra Pension Fund Limited.
Currently the company offers around 261 schemes catering to the variable risk appetite of
investors. It primarily invests in AAA and AA rated companies and possesses a substantial
value of asset under management (AuM). KMAMC also provides customers with the option
to avail income tax benefits under section 80C.
As of 31st Jan 2021, the Asset under management of Kotak AMC is 2.37 lakh crore. The
company has a net worth of Rs. 764.43 Bn, market cap of INR 2,692.06 Bn, and around
50,000+ employees.
KMAMC has 84 branches spread over 80 cities in India and has more than 7.5 lakh investors.
Vision: To be a responsible player in the Indian Mutual Fund space, always striving to offer
best in class products across investor lifecycle.
Mission: To deal with a Global Indian brand that best understands the customer needs and
delivers customized pragmatic solutions across multiple platforms.
INDIA”
Table 3.6.1 showing key information about Kotak Mahindra Mutual Fund
Mutual Fund Kotak Mahindra Mutual Fund
Founded 23 June 1998
Incorporated 5 August 1994
Sponsors Kotak Mahindra Bank Limited
Trustee Kotak Mahindra Trustee Co.Limited
Chairman Mr. Uday Kotak
MD and CEO Mr. Nilesh Shah
CIO Mr. Harsha Upadhyay(E) &

Ms. Lakshmi Iyer (D)
Investor service officer Ms. Sushma Mata
Complaints Officer Ms. Jolly Bhatt
3.6.2 Selected List of Kotak Mahindra Mutual Fund

Name of the Kotak Bluechip fund Kotak Emerging Kotak Small Cap Fund
scheme Equity fund
Category of Large cap fund Mid Cap Fund Small Cap Fund
Scheme
INDIA”
Type of Scheme open ended equity open ended equity open ended equity
Launch date 22/12/1998 12/02/2007 30/12/2004
Investment To generate capital To generate long To generate capital
Objective appreciation From a term capital appreciation from a
Portfolio of appreciation From a diverse portfolio of
predominantly equity Portfolio of equity equity related
and Equity related related securities, By securities
instruments Of investing
around 50 companies predominantly in
to 59 companies small and mid cap
companies
Benchmark Index NIFTY 100 Index NIFTY Mid-Cap 150 NIFTY Small Cap 250
(Total Return Index) Index (Total Return Index ( Total Return
Index) Index)
Minimum Rs 5000 Rs. 5,000 Rs. 5,000
Application
Amount
Scheme Options Growth option. Growth option. Growth option.
3.7 ICICI PRUDENTIAL MUTUAL FUND
INDIA”
ICICI Prudential mutual fund is one of India's top 2 largest Asset Management companies. It
is one of the oldest and most profitable mutual funds. Most of their offerings are rated
“AAAmfs” which indicate a high degree of confidence and reliability.
ICICI Prudential was set up in 1993 with ICICI bank and Prudential Plc acting as parents.
The Prudential Group is one of the world's oldest, largest and most influential insurance
companies.
ICICI Prudential mutual fund has played a major role in setting up the CRISIL rating system
in India. As a CIBIL score determines the creditworthiness of an individual, the CRISIL
score determines the health of mutual funds in India.
According to statistics made available as of 30th September 2018 the Average Assets Under
Management or AAUM of ICICI Prudential mutual fund, as it is also known, is Rs. 3.1 lakh
crore. It is managed by the trustee of the ICICI Prudential Trust Limited and is over 30 years
old.
The mutual fund was set up and incorporated in the same year 1993. As of March 31st, 2019,
it manages assets worth over Rs. 3.2 lakh crore. The organization has some of the best known
fund managers in the business, and it is growing at a rapid pace.
ICICI Prudential mutual fund is headquartered in Mumbai and provides a wide array of funds
designed to fit every socio-economic bracket. Prudential Group has plans to offload 3.7 % of
its stake in the mutual fund to pare down its share holding pattern to below 25% as per SEBI
rules.
ICICI Prudential mutual fund provides Portfolio Management Services from the Year 2000.
The Portfolio Management Services allows high net worth investors to invest in your more
concentrated portfolio taming get higher Returns. ICICI Prudential AMC was the first
institutional participate to offer the Portfolio Management services and has now got a
successful track record of over 10 years
INDIA”
3.7.1 Key information about ICICI Prudential Mutual Fund
Mutual Fund ICICI Prudential Mutual Fund
Founded 23 October 1993
Incorporated 22 June 1993
Sponsors Prudential Plc and ICICI Bank Limited
Trustee ICICI Prudential Trust Limited
MD and CEO Mr Nimesh Shah
CIO Mr. S. Naren
Compliance Officer Ms. Supriya Sapre
3.7.2 Selected list of ICICI Prudential Mutual Fund in India

Name of the scheme ICICI Prudential ICICI Prudential ICICI Prudential
Bluechip fund midcap fund small cap fund
Category of Scheme Large cap fund Mid Cap Fund Small Cap Fund
INDIA”
Type of Scheme open ended equity open ended equity open ended equity
Launch date 08/04/2008 06/09/2004 23/08/2007
Investment Objective To generate long- To generate capital To generate long-
term capital appreciation By term capital
appreciation And actively investing in appreciation by
Income distribution d and Mid Cap stocks equity and equity
to unit holders related Securities of
From a Portfolio equity funds of
that is invested in Companies
Equity and equity
related securities Of
about 20 companies
Belonging to the
large cap
companies
Benchmark Index NIFTY 100 Index NIFTY Mid-Cap 150 NIFTY Small Cap
(Total Return Index (Total Return 250 Index ( Total
Index) Index) Return Index)
Minimum Application Rs 5000 Rs. 5,000 Rs. 5,000
Amount
Scheme Options Growth Option Growth Option Growth Option
3.8 AXIS MUTUAL FUND
INDIA”
Axis Asset Management Company Limited, the formal name of Axis Mutual Fund, is a
mutual fund investment wing of Axis Bank, one of the largest private banks in India. 74.99%
share of the AMC is held by Axis Bank while the remaining 24% is held by Schroder
Singapore Holdings Private Limited.
The Axis MF AMC was incorporated back in October 2009 and has since abided by its three
pillars:
1. Outside-in view - Communicate with customers in their language to assist better in

taking the right investment decision.
2. Long-term wealth creation - Encourage investors to create a long term investment
strategy and play a critical road in their Wealth Management.
3. Long-term relationship - Build relationships beyond finances
As of 31st March 2021, the total assets under management of the companies stood at around
Rs.196548.6 crore.
Axis Asset Management Company Limited is present in more than 90 cities in India. It has
over 20 lakh invested and offers more than 170 investment schemes.
3.8.1 Key information about Axis Mutual Fund
Mutual fund Axis Mutual Fund
Asset management company Axis Asset Management Company Ltd.
Founded 4/09/2009
Incorporated 13/01/2009
Sponsors Axis Bank limited
Trustee Axis Mutual Fund Trustee Limited
Name of trustees Dr. T. C. Nair (Chairman)
INDIA”
Mr. Uday M. Chitale (Director)

Mr. Radhakrishnan Nair (Director)
Mr. Murray Alan Coble (Director)
Mr. Bapi Munshi (Director)
CEO Mr. Chandresh Kumar Nigam
COO Mr. Gopal Menon
Directors Ms. Sonia Singh

Mr. U.R. Bhat
Mr. R.K. Bammi
Mr. Shailendra Bhandari
Mr. Lieven Debruyne
Mr. Chandresh Kumar Nigam
Mr. Ashok Sinha
Mr. Amitabh Chaudhry
Head of sales Mr. Manesh Thakur
Head of fixed income Mr. R. Sivakumar
Head of equity Mr. jinesh Gopani
Company secretary Mr. Lalit Taparia
Investor Service Officer Mr. Milind Vengurlekar
Compliance officer Mr. Darshan Kapadia
3.8.2 Selected list of Axis Mutual Fund in India

Name of the Axis Bluechip fund Axis Mid Cap fund Axis small cap fund
scheme
Category of Large-cap fund Mid Cap Fund Small Cap Fund
INDIA”
Scheme
Type of Scheme open-ended equity open-ended equity open-ended equity
Launch date 11/11/2009 31/01/2011 11/11/2013
Investment To achieve long-term To achieve long-term To generate long-
Objective capital appreciation by capital appreciation term capital
investing in a by investing appreciation from a
diversified portfolio predominantly in diversified portfolio
predominantly equity and equity of predominantly
consisting of equity related instruments of equity and equity
and equity related midcap Companies related instruments of
securities of large cap small cap companies
companies
Benchmark Index S&P BSE 100 Index S&P BSE 150 Mid- NIFTY Small Cap
(Total Return Index) Cap Index (Total 250 Index ( Total
Return Index) Return Index)
Minimum Rs 5000 Rs. 5,000 Rs. 5,000
Application
Amount
Scheme Options Growth Option Growth Option Growth Option
3.9 Total Market Share of Mutual Fund Companies
INDIA”
The Average Asset under Management has been considered for the calculation of the Market
Share of Mutual Fund Companies. The data for comparing has been taken on a quarterly
basis of Jan-march 2021 of AAUM.
The total of AAUM is 25, 44,449.72 lakh.
Chart 3.9 showing that total market share of Mutual Fund Companies in India
INDIA”
ANALYSIS AND INTERPRETATION OF DATA
INDIA”
 HDFC MUTUAL FUND
Table no. 4.1 Showing the HDFC Top 100 Fund
YEAR 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
Standard
Deviation 0.12 0.10 0.21 0.11 0.19
(SD)
BETA
0.79 1.76 0.90 1.59 1.32
SHARPE
RATIO 0.26 -0.52 -0.07 -1.92 0.76
TREYNOR
RATIO 0.04 -0.03 -0.02 -0.13 0.11
JENSON’S
RATIO 0.13 0.24 0.13 0.14 0.40
Source: www.amfiindia.com
INTERPRETATION
The above table represents the Large Cap Fund of Open-ended Equity Mutual Fund Scheme
of HDFC Mutual Fund. Data analyzes were made for 5 years (2016-2021). The 5 years
average of Standard Deviation was 0.15, Beta was 1.27, Sharpe ratio was -0.30, Treynor’s
ratio was -0.01 and Jensen’s ratio was 0.21. To calculate standard deviation the Benchmark
NSE Total 100 Return Index is used as market returns. Risk free Rate of Return was taken as
8% as per 364 days Treasury bill was taken into considered.
Table no. 4.2 Showing the HDFC Midcap Opportunities Fund
INDIA”
YEAR 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
Standard
Deviation
(SD) 0.21 0.19 0.30 0.16 0.23
BETA 0.81 0.85 1.03 1.56 1.11
SHARPE
RATIO 0.25 -0.16 -0.24 -1.32 0.83
TREYNOR
RATIO 0.07 -0.04 -0.07 -0.14 0.17
JENSON’S
RATIO 0.01 -0.02 0.05 0.15 0.41
INTERPRETATION
The above table represents the Mid Cap Fund of Open-ended Equity Mutual Fund Scheme of
HDFC Mutual Fund. Data analyzes were made for 5 years (2016-2021). The 5 years average
of Standard Deviation was 0.22, Beta was 1.07, Sharpe ratio was -0.13, Treynor’s ratio was
0.00 and Jensen’s ratio was 0.12. To calculate standard deviation the Benchmark NSE 150
Midcap Index is used as market returns. Risk free Rate of Return was taken as 8% as per 364
days Treasury bill was taken into considered.
Table no 4.3 Showing the HDFC Small Cap Fund
INDIA”
YEAR 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
Standard
Deviation
0.12 0.10 0.10 0.18 0.19
(SD)
BETA 0.75 0.71 0.25 2.49 1.22
SHARPE
0.39 0.42 -0.67 -1.57 1.14
RATIO
TREYNOR
RATIO 0.06 0.06 -0.27 -0.11 0.18
JENSON’S
0.13 0.16 -0.03 0.37 0.45
RATIO
INTERPRETATION
The above table represents the Small Cap Fund of Open-ended Equity Mutual Fund Scheme
of HDFC Mutual Fund. Data analyses were made for 5 years (2016-2021). The 5 years
ratio was -0.02 and Jensen’s ratio was 0.22. To calculate standard deviation the Benchmark
NSE Small Cap 250 Index is used as market returns. Risk free Rate of Return was taken as
8% as per 364 days Treasury bill was taken into considered.
 IDBI MUTUAL FUND
Table no 4.4 Showing the IDBI India Top 100 Equity fund
INDIA”
YEAR 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
Standard
Deviation
0.12 0.10 0.21 0.11 0.19
(SD)
BETA 1.04 1.23 1.12 1.33 1.10
SHARPE
0.04 -0.47 -0.26 -1.25 0.69
RATIO
TREYNOR
RATIO 0.00 -0.04 -0.05 -0.10 0.12
JENSON’S
0.13 0.16 0.13 0.16 0.35
RATIO
INTERPRETATION
of IDBI Mutual Fund. Data analyzes were made for 5 years (2016-2021). The 5 years average
-0.01 and Jensen’s ratio was 0.19. To calculate standard deviation the Benchmark NSE Total
100 Return Index is used as market returns. Risk free Rate of Return was taken as 8% as per
364 days Treasury bill was taken into considered.
Table no 4.5 Showing the IDBI Mid Cap Fund
YEAR 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
INDIA”
Standard
Deviation
0.21 0.19 0.30 0.16 0.23
(SD)
BETA 0.04 0.70 0.90 1.57 1.03
SHARPE
0.48 -0.16 -0.32 -1.21 0.81
RATIO
TREYNOR
2.69 -0.04 -0.10 -0.13 0.18
RATIO
JENSON’S
-0.16 -0.02 0.01 0.17 0.39
RATIO
INTERPRETATION
IDBI Mutual Fund. Data analyses were made for 5 years (2016-2021). The 5 years average of
Standard Deviation was 0.22, Beta was 0.85, Sharpe ratio was -0.08, Treynor’s ratio was 0.52
and Jensen’s ratio was 0.08. To calculate standard deviation the Benchmark NSE 150 Midcap
Index is used as market returns. Risk free Rate of Return was taken as 8% as per 364 days
Treasury bill was taken into considered.
Table no 4.6 Showing the IDBI Small Cap Fund
YEAR 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
INDIA”
Standard
Deviation
0.12 0.10 0.10 0.18 0.19
(SD)
BETA 0.00 0.07 0.03 2.45 0.88
SHARPE
-0.66 -0.59 -1.04 -1.26 1.00
RATIO
TREYNOR
RATIO 0.00 -0.92 -3.29 -0.09 0.22
JENSON’S
-0.08 -0.05 -0.10 0.41 0.36
RATIO
INTERPRETATION
of IDBI Mutual Fund. Data analyses were made for 5 years (2016-2021). The 5 years average
-0.82 and Jensen’s ratio was 0.11. To calculate standard deviation the Benchmark NSE Small
Cap 250 Index is used as market returns. Risk free Rate of Return was taken as 8% as per 364
days Treasury bill was taken into considered.
 KOTAK MAHINDRA MUTUAL FUND
Table no 4.7 Showing the Kotak Bluechip Fund
INDIA”
YEAR 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
Standard
Deviation
0.12 0.10 0.21 0.11 0.19
(SD)
BETA 0.84 1.19 0.97 1.52 1.09
SHARPE
-0.01 -0.38 -0.18 -1.40 0.81
RATIO
TREYNOR
RATIO 0.00 -0.03 -0.04 -0.10 0.14
JENSON’S
0.10 0.16 0.12 0.18 0.37
RATIO
INTERPRETATION
of Kotak Mahindra Mutual Fund. Data analyzes were made for 5 years (2016-2021). The 5
years average of Standard Deviation was 0.15, Beta was 1.12, Sharpe ratio was -0.23,
Treynor’s ratio was -0.01 and Jensen’s ratio was 0.19. To calculate standard deviation the
Benchmark NSE Total 100 Return Index is used as market returns. Risk free Rate of Return
was taken as 8% as per 364 days Treasury bill was taken into considered.
Table no 4.8 Showing the Kotak Emerging Equity Fund
YEAR 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
INDIA”
Standard
Deviation
0.21 0.19 0.30 0.16 0.23
(SD)
BETA 0.90 0.75 0.92 1.72 1.01
SHARPE
0.32 -0.14 -0.25 -1.06 0.91
RATIO
TREYNOR
RATIO 0.07 -0.04 -0.08 -0.10 0.20
JENSON’S
0.02 -0.01 0.04 0.23 0.41
RATIO
INTERPRETATION
Kotak Mahindra Mutual Fund. Data analyses were made for 5 years (2016-2021). The 5 years
ratio was 0.01 and Jensen’s ratio was 0.14. To calculate standard deviation the Benchmark
NSE 150 Midcap Index is used as market returns. Risk free Rate of Return was taken as 8%
as per 364 days Treasury bill was taken into considered.
Table no 4.9 Showing the Kotak Small Cap Fund
YEAR 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
INDIA”
Standard
Deviation
0.12 0.10 0.10 0.18 0.19
(SD)
BETA 0.79 0.48 -0.08 2.68 1.02
SHARPE
0.42 -0.26 -0.97 -1.05 1.39
RATIO
TREYNOR
RATIO 0.06 -0.06 1.24 -0.07 0.26
JENSON’S
0.14 0.05 -0.11 0.51 0.46
RATIO
INTERPRETATION
of Kotak Mahindra Mutual Fund. Data analyses were made for 5 years (2016-2021). The 5
Treynor’s ratio was 0.29 and Jensen’s ratio was 0.21. To calculate standard deviation the
Benchmark NSE Small Cap 250 Index is used as market returns. Risk free Rate of Return
 ICICI PRUDENTIAL MUTUAL FUND
Table no 4.10 Showing the ICICI Prudential Bluechip Fund
INDIA”
YEAR 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
Standard
Deviation
0.12 0.10 0.21 0.11 0.19
(SD)
BETA 0.79 1.26 0.85 1.51 1.10
SHARPE
0.15 -0.27 -0.18 -1.58 0.79
RATIO
TREYNOR
RATIO 0.02 -0.02 -0.05 -0.12 0.14
JENSON’S
0.11 0.18 0.10 0.16 0.36
RATIO
INTERPRETATION
of ICICI Prudential Mutual Fund. Data analyzes were made for 5 years (2016-2021). The 5
Treynor’s ratio was -0.01 and Jensen’s ratio was 0.18. To calculate standard deviation the
Benchmark NSE Total 100 Return Index is used as market returns. Risk free Rate of Return
Table no 4.11 Showing the ICICI Prudential Mid Cap Fund
YEAR 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
INDIA”
Standard
Deviation
0.21 0.19 0.30 0.16 0.23
(SD)
BETA 0.78 0.88 0.78 1.59 1.01
SHARPE
0.23 -0.09 -0.26 -1.39 0.93
RATIO
TREYNOR
RATIO 0.06 -0.02 -0.10 -0.14 0.21
JENSON’S
0.01 0.00 0.02 0.14 0.41
RATIO
INTERPRETATION
ICICI Prudential Mutual Fund. Data analyses were made for 5 years (2016-2021). The 5
Benchmark NSE 150 Midcap Index is used as market returns. Risk free Rate of Return was
taken as 8% as per 364 days Treasury bill was taken into considered.
Table no 4.12 Showing the ICICI Prudential Small Cap Fund
YEAR 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
INDIA”
Standard
Deviation
0.12 0.10 0.10 0.18 0.19
(SD)
BETA 0.86 0.62 0.48 1.62 0.08
SHARPE
0.29 -0.17 -1.21 -1.10 1.10
RATIO
TREYNOR
RATIO 0.04 -0.03 -0.26 -0.12 2.70
JENSON’S
0.14 0.08 -0.05 0.22 0.23
RATIO
INTERPRETATION
of ICICI Prudential Mutual Fund. Data analyses were made for 5 years (2016-2021). The 5
Benchmark NSE Small Cap 250 Index is used as market returns. Risk free Rate of Return
was taken as 8% as per 364 days Treasury bill was taken into considered
 AXIS MUTUAL FUND
Table no 4.13 Showing the Axis Bluechip Fund
INDIA”
YEAR 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
Standard
Deviation 0.12 0.10 0.21 0.11 0.19
(SD)
BETA
0.91 0.93 0.91 1.13 1.20
SHARPE
RATIO -0.13 -0.04 -0.09 -0.85 0.50
TREYNOR
RATIO -0.02 -0.01 -0.02 -0.08 0.08
JENSON’S
RATIO 0.09 0.15 0.13 0.16 0.34
INTERPRETATION
of Axis Mutual Fund. Data analyzes were made for 5 years (2016-2021). The 5 years average
-0.01 and Jensen’s ratio was 0.17. To calculate standard deviation the Benchmark NSE Total
100 Return Index is used as market returns. Risk free Rate of Return was taken as 8% as per
364 days Treasury bill was taken into considered.
Table no 4.14 Showing the Axis Mid Cap Fund
YEAR 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
INDIA”
Standard
Deviation
0.21 0.19 0.30 0.16 0.23
(SD)
BETA 0.87 0.57 0.86 1.28 0.87
SHARPE
0.03 0.03 -0.13 -0.66 0.64
RATIO
TREYNOR
RATIO 0.01 0.01 -0.05 -0.08 0.17
JENSON’S
-0.04 0.02 0.06 0.19 0.32
RATIO
INTERPRETATION
Axis Mutual Fund. Data analyses were made for 5 years (2016-2021). The 5 years average of
Standard Deviation was 0.22, Beta was 0.89, Sharpe ratio was -0.02, Treynor’s ratio was 0.01
and Jensen’s ratio was 0.11. To calculate standard deviation the Benchmark NSE 150 Midcap
Index is used as market returns. Risk free Rate of Return was taken as 8% as per 364 days
Treasury bill was taken into considered.
Table no 4.15 Showing the Axis Small Cap Fund
YEAR 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
INDIA”
Standard
Deviation
0.12 0.10 0.10 0.18 0.19
(SD)
BETA 0.59 0.32 0.23 2.42 0.84
SHARPE
0.17 -0.20 -0.75 -0.67 0.87
RATIO
TREYNOR
RATIO 0.03 -0.07 -0.34 -0.05 0.20
JENSON’S
0.09 0.03 -0.04 0.51 0.33
RATIO
INTERPRETATION
of Axis Mutual Fund. Data analyses were made for 5 years (2016-2021). The 5 years average
-0.05 and Jensen’s ratio was 0.18. To calculate standard deviation the Benchmark NSE Small
Cap 250 Index is used as market returns. Risk free Rate of Return was taken as 8% as per 364
days Treasury bill was taken into considered
Table no 4.16 Showing the Standard deviation of Large capital of Mutual Fund
S.L. no Bank Mutual Fund Standard Deviation (SD)
1 Axis Mutual Fund 0.15
INDIA”
2 ICICI Prudential Mutual Fund 0.15

3 Kotak Mahindra Mutual Fund 0.15
4 HDFC Mutual Fund 0.15
5 IDBI Mutual Fund 0.15
Chart no 4.16 Showing the Standard deviation of Large capital of Mutual Fund
Standard Deviation (Large Cap Fund)
0.15 0.15 0.15 0.15 0.15
INTERPRETATION
From above graph we can see that all the Bank Mutual Funds have same Standard Deviation
i.e. 0.15. The Standard Deviation is calculated on the basis of Market returns for 5 years
(2016-2021). The Benchmark index used in market returns calculation was NIFTY Total 100
Return Index.
Table no 4.17 Showing the Beta of Large capital of Mutual Fund
S.L. no Bank Mutual Fund Beta
INDIA”
Chart no 4.17 Showing the Beta of Large capital of Mutual Fund
Beta (Large Cap)

1.27 1.16
1.02 1.1 1.12
d d d d nd
F un F un F un F un u
l al l l lF
ua tu ua ua ua
ut u ut ut ut
s M l M M M M
i ti a dr
a
FC BI
Ax en in ID
d ah HD
P ru M
k
I CI ota
IC K
INTERPRETATION
From above graph, HDFC Mutual Fund has highest Beta as compared with other mutual
funds and Axis Mutual Fund has lowest Beta as compared with other mutual funds.
Table no 4.18 Showing the Sharpe Ratio of Large capital of Mutual Fund
S.L. no Bank Mutual Fund Sharpe Ratio
1 Axis Mutual Fund -0.12
INDIA”
2 ICICI Prudential Mutual Fund -0.22

3 Kotak Mahindra Mutual Fund -0.23
4 HDFC Mutual Fund -0.30
5 IDBI Mutual Fund -0.25
Chart no 4.18 Showing the Sharpe Ratio of Large capital of Mutual Fund
Sharpe Ratio (Large Cap Fund)

Axis Mutual Fund ICICI Prudential Mutual Fund Kotak Mahindra Mutual Fund
HDFC Mutual Fund IDBI Mutual Fund
-0.12
-0.22 -0.23
-0.25
-0.3
INTERPRETATION
From above graph, Axis Mutual Fund has highest Sharpe Ratio as compared with other
mutual funds and HDFC Mutual Fund has lowest Sharpe Ratio as compared with other
mutual funds.
Table no 4.19 Showing the Treynor’s Ratio of Large capital of Mutual Fund
S.L. no Bank Mutual Fund TREYNOR’S RATIO
INDIA”

Chart no 4.19 Showing the Treynor’s Ratio of Large capital of Mutual Fund
Treynor's Ratio (Large Cap Fund)

Axis Mutual Fund ICICI Prudential Mutual Fund
Kotak Mahindra Mutual Fund HDFC Mutual Fund
IDBI Mutual Fund
-0.01 -0.01 -0.01 -0.01 -0.01
INTERPRETATION
From above graph, we can observe that all Bank Mutual Funds have same ratio i.e. -0.01.
Table no 4.20 Showing the Jensen’s Ratio of Large capital of Mutual Fund
S.L. no Bank Mutual Fund JENSEN’S RATIO
INDIA”

Chart no 4.20 Showing the Jensen’s Ratio of Large capital of Mutual Fund
Jensen's Ratio (Large Cap)
0.17 0.18 0.21

0.19
0.19
Axis Mutual
Fund ICICI Prudential
Mutual Fund Kotak Mahindra HDFC Mutual
Mutual Fund IDBI Mutual
Fund
Fund
INTERPRETATION
From above graph, Axis Mutual Fund has lowest Jensen’s Ratio as compared with other
mutual funds and HDFC Mutual Fund has highest Jensen’s Ratio as compared with other
mutual funds.
Table no 4.21 Showing the Standard deviation of Mid capital of Mutual Fund
INDIA”

Chart no 4.21 Showing the Standard deviation of Mid capital of Mutual Fund
Standard Deviation (Mid Cap Fund)
0.22 0.22 0.22 0.22 0.22
d d d d d
un un un un un
lF lF lF lF lF
ua ua ua ua ua
ut ut ut ut ut
sM lM a
M M
BI
M
xi nt
ia dr FC
A e in H
D ID
ru
d ah
P M
C I ak
CI ot
I K
INTERPRETATION
(2016-2021). The Benchmark index used in market returns calculation was NIFTY Mid cap
150 Index.
Table no 4.22 Showing the Beta of Mid capital of Mutual Fund

INDIA”

Chart no 4.22 Showing the Beta of Mid capital of Mutual Fund
Beta (Mid Cap)
0.89 1.01 1.06

1.07
0.850000000000
001
Axis Mutual
Mutual Fund Kotak Mahindra HDFC Mutual
Mutual Fund IDBI Mutual
Fund
Fund
INTERPRETATION
From above graph, we can observe that HDFC Mutual Fund has highest and IDBI Mutual
Fund has lowest as compared with other Bank Mutual Funds.
Table no 4.23 Showing the Sharpe Ratio of Mid capital of Mutual Fund
INDIA”

Chart no 4.23 Showing the Sharpe Ratio of Mid capital of Mutual Fund
Sharpe Ratio (Mid Cap Fund)
Axis Mutual Fund

ICICI Prudential Mutual Fund
Kotak Mahindra Mutual Fund
HDFC Mutual Fund
0 IDBI Mutual Fund
-0.02
-0.04
-0.06
-0.08
-0.1
-0.12
-0.14
INTERPRETATION
From above graph, Axis Mutual Fund has highest Sharpe Ratio as compared with other
mutual funds and HDFC Mutual Fund has lowest Sharpe Ratio as compared with other
mutual funds.
Table no 4.24 Showing the Treynor’s Ratio of Mid capital of Mutual Fund
INDIA”

2 ICICI Prudential Mutual Fund 0
4 HDFC Mutual Fund 0
Chart no 4.24 Showing the Treynor’s Ratio of Mid capital of Mutual Fund
Treynor's Ratio (Mid Cap Fund)
0.52
0.01
0
0.01
Axis Mutual 0
Mutual Fund Kotak Mahindra
Mutual Fund HDFC Mutual
Fund IDBI Mutual
Fund
INTERPRETATION
From above graph, IDBI Mutual Fund has highest Treynor’s Ratio as compared with other
mutual funds. HDFC Mutual Fund and ICICI Prudential has lowest Treynor’s Ratio as
compared with other mutual funds.
Table no 4.25 Showing the Jensen’s Ratio of Mid capital of Mutual Fund
INDIA”

Chart no 4.25 Showing the Jensen’s Ratio of Mid capital of Mutual Fund
Jensen's Ratio (Mid Cap Fund)
0.11 0.14
0.12
0.12
0.08
Axis Mutual
Mutual Fund Kotak
Mahindra HDFC Mutual
Mutual Fund Fund IDBI Mutual
Fund
INTERPRETATION
From above graph, Kotak Mahindra Mutual Fund has highest Jensen’s Ratio as compared
with other mutual funds and IDBI Mutual Fund has lowest Jensen’s Ratio as compared with
other mutual funds.
Table no 4.26 Showing the Standard deviation of Small capital of Mutual Fund
INDIA”

Chart no 4.26 Showing the Standard deviation of Small capital of Mutual Fund
Standard Deviation (Small Cap Fund)
0.14 0.14 0.14 0.14 0.14
d d d d d
F un F un Fun Fun F un
l l l l l
t ua tua tua tua tua
u u u u u
sM l M a M M I M
xi ia r C B
A ent ind D
F
ID
d ah H
P ru M
I ak
C IC ot
I K
INTERPRETATION
(2016-2021). The Benchmark index used in market returns calculation was NIFTY Small cap
250 Index.
Table no 4.27 Showing the Beta of Small capital of Mutual Fund
INDIA”

Chart no 4.27 Showing the Beta of Small capital of Mutual Fund
Beta (Small Cap Fund)
0.88 0.98 1.08

0.730000000000
001
0.690000000000
001
Axis Mutual
Fund IDBI Mutual
Fund
INTERPRETATION
From above graph, IDBI Mutual Fund has lowest Beta as compared with other mutual funds
and HDFC Mutual Fund has highest Beta as compared with other mutual funds.
Table no 4.28 Showing the Sharpe Ratio of Small capital of Mutual Fund
INDIA”

Chart no 4.28 Showing the Sharpe Ratio of Small capital of Mutual Fund
Sharpe Ratio (Small Cap Fund)

1
Axis Mutual Fund

0 HDFC Mutual Fund
-0.1 IDBI Mutual Fund
-0.2
-0.3
-0.4
-0.5
-0.6
INTERPRETATION
From above graph, IDBI Mutual Fund has lowest Sharpe Ratio as compared with other
mutual funds and HDFC Mutual Fund has highest Sharpe Ratio as compared with other
mutual funds.
Table no 4.29 Showing the Treynor’s Ratio of Small capital of Mutual Fund
INDIA”

Chart no 4.29 Showing the Treynor’s Ratio of Small capital of Mutual Fund
Treynor's Ratio (Small Cap Fund)
Axis Mutual Fund

0.6 HDFC Mutual Fund
0.4
0.2 IDBI Mutual Fund
0
-0.2
-0.4
-0.6
-0.8
-1
INTERPRETATION
From above graph, IDBI Mutual Fund has lowest Treynor’s Ratio as compared with other
mutual funds and ICICI Prudential Mutual Fund has highest Treynor’s Ratio as compared
with other mutual funds.
Table no 4.30 Showing the Jensen’s Ratio of Small capital of Mutual Fund
INDIA”

Chart no 4.30 Showing the Jensen’s Ratio of Small capital of Mutual Fund
Jensen's Ratio (Small Cap Fund)
0.18 0.21 0.22
0.12
0.11
Axis Mutual
Fund IDBI Mutual
Fund
INTERPRETATION
From above graph, IDBI Mutual Fund has lowest Jensen’s Ratio as compared with other
mutual funds and HDFC Mutual Fund has highest Jensen’s Ratio as compared with other
mutual funds.
Performance comparison among Mutual Fund Schemes by using Ratio

analysis and Statistical analysis:
INDIA”
Table no 4.31 Showing the Performance comparison of Large Capital of Open-Ended

Equity Mutual Fund Schemes
Bank Mutual Fund Sharpe RANK Treynor’s RAN Jensen’s RANK

ratio ratio K ratio
Axis Mutual Fund -0.12 5 -0.01 - 0.17 4
ICICI Prudential Mutual -0.22 4 -0.01 - 0.18 3

Fund
Kotak Mahindra Mutual -0.23 3 -0.01 - 0.19 2

Fund
HDFC Mutual Fund -0.30 1 -0.01 - 0.21 1
IDBI Mutual Fund -0.25 2 -0.01 - 0.19 2
INTERPRETATION
From above table, with comparing performance measure using Sharpe ratio was HDFC
Mutual Fund has 1st rank and Axis Mutual Fund has 5th rank. With comparing performance
using Treynor’s Ratio was every bank mutual funds has same performance. With comparing
performance using Jensen’s ratio was HDFC Mutual fund has 1 st rank and Axis mutual fund
has lowest rank.
Table no 4.32 Showing the Performance comparison of Mid Capital Of Open-Ended

INDIA”

ratio ratio K ratio
Axis Mutual Fund -0.02 1 0.01 2 0.11 3
ICICI Prudential Mutual -0.12 4 0 3 0.12 2

Fund
Kotak Mahindra Mutual -0.04 2 0.01 2 0.14 1

Fund
HDFC Mutual Fund -0.13 5 0 3 0.12 2
IDBI Mutual Fund -0.08 3 0.52 1 0.08 4
INTERPRETATION
Mutual Fund has 5th rank and Axis Mutual Fund has 1st rank. With comparing performance
using Treynor’s Ratio was IDBI Mutual Fund has 1 st rank and ICICI Prudential & HDFC
Mutual Fund has lowest rank. With comparing performance using Jensen’s ratio was Kotak
Mahindra Mutual fund has 1st rank and IDBI mutual fund has lowest rank.
Table no 4.33 Showing the Performance comparison of Small Capital Of Open-Ended

INDIA”

ratio ratio K ratio
Axis Mutual Fund -0.12 3 -0.05 4 0.18 3
ICICI Prudential Mutual -0.22 4 0.47 1 0.12 4

Fund
Kotak Mahindra Mutual -0.09 2 0.29 2 0.21 2

Fund
HDFC Mutual Fund -0.06 1 -0.02 3 0.22 1
IDBI Mutual Fund -0.51 5 -0.82 5 0.11 5
INTERPRETATION
Mutual Fund has 1st rank and IDBI Mutual Fund has 5 th rank. With comparing performance
using Treynor’s Ratio was IDBI Mutual Fund has 5 th rank and ICICI Prudential Mutual Fund
has 1st rank. With comparing performance using Jensen’s ratio was HDFC Mutual fund has
1st rank and IDBI mutual fund has lowest rank.
INDIA”
SUMMARY OF FINDINGS, CONCLUSIONS AND SUGGESTIONS

INDIA”
5.1 FINDINGS
 From Open-ended Equity Mutual fund Schemes, Large Cap of selected Bank Mutual
funds are performing similar to others.
 In Large cap of open-ended Equity Mutual Funds, the performance of selected Mutual
Funds using Treynor’s ratio was very poor. As they have negative ratio because of
less portfolio returns compared with Risk free rate.
 In Mid cap of Open-ended Equity Mutual Funds, the performance of selected Mutual
Funds using Treynor’s ratio was very average. In this category of mutual fund only
IDBI mutual fund has performing well as compared with others.
 In Small cap of open-ended Equity Mutual Funds, the performance of selected Mutual
Funds using Treynor’s ratio was very poor for Axis MF, HDFC MF, and IDBI MF as
they have negative ratio because of less portfolio returns compared with Risk free
rate. And has best performance for Kotak Mahindra MF and ICICI MF as their
portfolio returns are higher than risk free rate.
 In Axis MFs, Mid cap and Small cap funds are less risky as they have their Beta value
is less than 1 and Large Cap fund has high risk as their Beta is more than 1.
 In HDFC MF, all selected mutual funds are high risk funds.
 In Kotak Mahindra MF, Large Cap and Mid Cap funds are high risk whereas Small
cap fund has less risk.
 In ICICI MF, Large Cap and Mid Cap funds are high risk whereas Small cap fund has
less risk.
 In IDBI MF, Large Cap fund has high risk whereas Small cap and Mid Cap funds are
less risk.
 As Standard deviation is calculated on NIFTY Benchmark Index, all the funds which
are in same category has same value.
INDIA”
 Selected Bank Mutual fund performances as reduced than before from the year 2020
due to pandemic.
 By comparing Sharpe ratio, all the mutual funds has unfavorable performances as
they have negative ratios.
 Selected Bank Mutual funds will get higher returns over CAPM returns.
 In large cap fund of Open-ended Equity MF schemes, From the selected bank MF,
HDFC MF can be selected as they are providing better returns and best performance
as compared with other Bank MF.
 In Mid cap fund of Open-ended Equity MF schemes, From the selected bank MF,
Axis MF can be selected as they are providing better returns and best performance as
compared with other Bank MF
 In Small cap fund of Open-ended Equity MF schemes, From the selected bank MF,
HDFC MF and Kotak Mahindra MF can be selected as they are providing better
returns and best performance as compared with other Bank MF.
INDIA”
5.2 CONCLUSIONS
A mutual fund is the trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected from investors is invested by the fund
manager in different types of securities. These could range from shares to debentures to
money market instruments, depending upon the scheme’s stated objective. Investors while
investing in mutual funds have to verify documents related to investment, because risk plays
a significance role while investing, returns are subject to market risk. Mutual fund is subject
to market risk, despite of that it have low risk than stock market. This is proved in
performance evaluation section of the present study. Performance evaluation measurement
ratios are Sharpe ratio, Treynor’s ratio and Jensen’s ratio are used by fund managers to take
decision of investment and to diversify portfolio. The present study was made on Open-
ended Equity Mutual funds. The performance of selected mutual funds is better when
invested in long term period. In long run every mutual fund will perform better way. The
large cap funds are better performing then mid and small cap.
INDIA”
5.3 SUGGESTIONS
 Mutual funds are subject to market risk. Before investing in mutual funds, investor
should check the full documents of the scheme.
 Investor should invest in long period rather than a short period.
 Investor should invest in diversified schemes to reduce their risk.
 The study can be done on other funds like Debt funds and other funds.
 The present study can be extended by taking a larger sample of both open ended as
well as close ended schemes. The study period can also be extended. Analysis can be
done by applying multifactor models like fama-french three factor Model and
Carhart’s four Factor Model.
 One can evaluate Performance of a mutual fund on the basis of different fund
characteristics such as Fund size, turnover, management and load fee etc.
 One potential are for future research is how the emergence of exchange traded fund
affect the performance timings and persistence of mutual fund
 One can not only evaluate the performance of Indian Mutual Funds schemes but also
evaluate the aggregate performance of fund families
INDIA”
BIBLIOGRAPHY
INDIA”
1. Dr. S. Narayan Rao, (2013), “Performance Evaluation of Indian Mutual Funds”.

Paper no. 433100 and PP. 1-24
2. Ashok Banerjee, Soumya Guha Deb, and B.B Chakrabarti, (2007), “Performance
of Indian Equity Mutual Funds vis-a-vis. Their Style Benchmarks: An Empirical
Exploration.” paper no 962827 and PP. 1-18
3. Sharad Panwar, R. Madhumathi,(2006), "Characteristics and performance

evaluation of selected mutual funds in India". Paper no 876402 and PP. 1-19
4. Olaf Grewe and Richard Stehle,(2001), " The Long-Run Performance of German
Stock Mutual Funds". Paper no 271452 and PP 1-32
5. Juan Carlos, (2005), "Portfolio Performance: Factors or Benchmarks". Paper no

760204 and PP 1-26
6. D.N.Rao,(2006), " Investment Styles and Performance of Equity Mutual Funds in

India". Paper no 922595 and PP 1-30
7. Manoj Jhanwar, Sanjay Sehgal (2007), "Short Term Persistence in Mutual Funds
Performance: Evidence from India". Paper no 962829 and PP 1-23
8. S.P.Kothari, Jerold B. Warner (1997), "Evaluating Mutual Fund Performance".

Paper no 75871 and PP 1-46
9. Kaushik Bhattacharjee, and Prof. Bijan Roy, (2006), "Fund Performance

Measurement without Benchmark - A Case of Select Indian Mutual Funds". Paper no
962035 and PP 1-10
10. Bijan Roy, Saikat Sovan Deb (2003), " The Conditional Performance of Indian
Mutual Funds: An empirical study". Paper no 593723 and PP 1-24
11. D.N.Rao, (2006), " A Four-Step Model to Evaluate Mutual Funds: A Case Study of
Equity Mutual Funds in Saudi Arabia". Paper no 946937 and PP 1-16
12. Aymen Karoui, Iwan Meier,(2008)," Performance and Characteristics of Mutual

Fund Starts". Paper no 1313284 and PP 1-37
INDIA”
13. Miguel A. Ferreira, Annel Keswani, Antonio F. Miguel and Sofia Brito Ramos
(2006), " The Determinants of Mutual Fund Performance: A Cross-country Study".
14. Sudhir Nanda, Parvez Ahmed, Partha Gangopadhyay, (2001)," Performance of

Emerging Market Mutual Funds and U.S. Monetary Policy". Paper no 2892728 and
PP 1-41
15. Stefan Engstrom, (2004), "Investment Strategies, Fund Performance and Portfolio
Characteristics". Paper no 520442 and PP 1-29
16. Dr. Deepak Agrawal, (2007), "Measuring Performance of Indian Mutual Funds".
17. Dr. S.M. Tariq Zafar, Dr. D. S. Chaubey, Syed Imran Nawab Ali, (2020), An
empirical study on Indian mutual funds equity diversified growth schemes and their
performance evaluation
18. Nimalathasan and Gandhi, (2012) Mutual Fund Financial Performance Analysis: A
Comparative Study on Equity Diversified schemes and Equity Mid-Cap Schemes.
19. Dr S.M. Tariq Zafar, Dr Adeel Maqbool & Mr. S.M. Khalid, (2012). An
Empirical Study on Indian Mutual Funds and Their Performance Evaluation Prior to
Recession
20. Dr. Naliniprava Tripathy, (2004). An Empirical Analysis of Performance

Evaluation of Mutual Funds in India- A study on equity schemes
21. Amitabh Gupta, (2000), Investment Performance of Indian Mutual Funds: An

Empirical Study.
22. M. Vijay Anand, (2000), "Analysis of the performance of Equity funds (Diversified)
Open-end Mutual Fund during 1997 - 2000".
23. Mohit Gupta and Navdeep Agarwal, (2009), "Mutual Fund Portfolio Creation
Using Industry Concentration". ICFAI University.
INDIA”
24. Kalpesh.P.Prajapati, Mahesh.K.Patel, (2012), Comparative study of performance

evaluation of mutual funds schemes of Indian companies.
25. M S Annapoorna and K. Gupta, (2013), "A Comparative analysis of returns of

mutual funds schemes ranked 1 by CRISIL".
26. Rajput and Singh, (2014), "A Study of Major Mutual Funds in India".
27. Ms. Shilpi Pal and Arti Chandani,(2014), "A Critical Analysis of Selected Mutual
Funds in India".
28. Dr. Shri Prakash Soni, Dr. Deepali G. Bankapure & Dr. Mahesh Bhutada,
(2015), "Comparative analysis of mutual fund schemes available at Kotak Mutual
Fund and HDFC Mutual Fund".
29. Jayant R Kale and Venkatesh Panchapagesan, (2012), "Indian Mutual fund
industry: Opportunities and Challenges”.
30. R.Nithya, (2004), "Performance evaluation of Franklin Templeton Mutual funds".
31. Prasath. R.H, (2009), "A study on analysis of the performance of the mutual fund
with reference to HDFC".
32. Dr S Anand and Dr. V. Murugaiah, (2003), "Analysis of components of investment

performance - An empirical Study of mutual funds in India".
33. Stephen J Brown, (2012), "The efficient markets hypothesis: The demise of the
demon of chance?”
34. Mallikarjun. R and Ranjeetha. R, (2013), "Risk adjusted performance evaluation of

selected balanced mutual fund schemes in India".
Websites
1. www.amfiindia.com
INDIA”
2. www.nse1india.com
3. www.moneycontrol.com
4. www.groww.in
5. www.paissabazar.com
6. https://m.rbi.org.in
7. www.slideshare.net

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“A STUDY ON PERFORMANCE EVALUATION OF OPEN-ENDED

EQUITY MUTUAL FUND SCHEMES OF INDIAN BANKING SECTOR IN

1.2 Financial management

SPECIFIC AREA OF THE TOPIC CHOSEN

1.3 MUTUAL FUND

A mutual fund may be a speculation apparatus that allows little financial backers admittance to a

1.3.2 Definition of Mutual Fund

1.4 VALUATION OF MUTUAL FUND

1.4.1 Calculation of NAV

1.5 Mutual Fund Structure in India:

● Sponsor: Sponsor is essentially a promoter of the fund. for instance Bank of Baroda,

● AMC: Asset Management Company (AMC) could be a set of economic professionals who

 Custodian: A Custodian keeps safe custody of the investments (related documents of

1.6 Flow of operation

1.7 Advantages of Mutual Fund

1.8 Disadvantages of Mutual Fund

 Dilution: While diversification averages investor risk of loss it may tell you

1.9 Theories of Mutual funds

● Michael C. Jensen (1967) derived a risk-adjusted measure of portfolio performance

● Black et al. (2006) examined customer‘s choice of financial services distribution

1.10 TYPES OF MUTUAL FUNDS/ SCHEMES

a. Open ended schemes/funds: An open ended fund or scheme is one that is

● Growth or equity oriented scheme: The aim of Growth Fund is to provide

e. Dividend Yield fund - The objective of equity income or dividend yield

who are considered to be of “investment grade.” but high yield debt

● Index Schemes: An index fund is a portfolio of stock or bonds designed to

● Sector Specific Scheme: Mutual funds which invest in a particular sector or

1.11 History of Mutual Fund

1.12 HISTORY OF MUTUAL FUNDS IN INDIA

The formation of Unit Trust of India marked the evolution

❖ Phase I. Establishment and Growth of Unit Trust of India - 1964-87:

❖ Phase II. Entry of Public Sector Funds - 1987-1993:

❖ Phase III. Emergence of Private Sector Funds - 1993-96:

❖ Phase IV. Growth and SEBI Regulation - 1996-2004:

UTI was re-organized into two parts:

1. The Specified Undertaking.

❖ Phase V. Growth and Consolidation - 2004 Onwards:

Presently India has 170 passive mutual fund schemes.

REVIEW OF LITERATURE AND RESEARCH DESIGN

REVIEW OF LITERATURE AND RESEARCH DESIGN

2.1 Review of Literature

Nimalathasan and Gandhi, (2012), focused on the financial performance analysis of

Sharad Panwar and R Madhumathi, (2006), identified the difference in characteristics of

The 4 step model was as follows:

1. Compare returns across funds within the same category.

Juan Carlos, (2005),analyzed whether it was more appropriate to apply a factor-based or a

Stefan Engstrom, (2004), provided extensive evidence on portfolio characteristics of mutual

diversified portfolio. However, diversification could be achieved by extending the funds'

S.P.Kothari, Jerold B. Warner, (1997), examined the empirical properties of performance

2.2 STATEMENT OF PROBLEM

2.3 SCOPE OF THE STUDY

Scope of the project research is listed below:

2.4 OBJECTIVES OF STUDY

The major objectives of the study are as follows:

2.5 RESEARCH METHODOLOGY

2.6 RESEARCH DESIGN

It is a framework of various research methods and numerous techniques chosen by a

2.7 COLLECTION OF DATA

2.8 SAMPLING DESIGN

2.9 SAMPLE SIZE

2.10 STATISTICAL TOOLS OF DATA COLLECTION

4. Treynor's ratio - Treynor’s ratio is a measurement of the returns earned in excess of

R f = risk free rate of return