“PERFORMANCE ANALYSIS OF SELECTED EQUITY HYBRID

MUTUAL FUNDS”
Ms. Vaishali Mopari1
Dr. Vinod Bhelose2
1- Student, 2- Assistant Professor
Institute of Industrial and Computer Management and Research (MBA@IICMR)
Nigdi, Pune, Maharashtra (India)

ABSTRACT:
The purpose of the study was to apprehend the performance analysis of selected
equity hybrid mutual fund schemes in India. Five Equity Hybrid Mutual Fund
schemes had been selected, secondary data was used for the performance analysis of
the fund and it was achieved by using various tools and techniques like average
returns, standard deviation, sharp ratio, beta, and alpha. It gives a deep understanding
of the performance analysis of equity hybrid direct growth mutual fund schemes. The
result of the study stated that Kotak was giving the highest returns than the other four
funds but also contained a high risk. Kotak was an aggressive fund, Axis and SBI are
containing the same risk and the same sharp ratio but Axis was giving better returns
than the SBI. Therefore moderate conservative investors may prefer to invest in Axis
and SBI funds, IDFC and HDFC both are giving low returns than the other funds but
as compared to HDFC, IDFC was better performing. In HDFC and IDFC conservative
investors may prefer to invest.

KEYWORDS: Mutual Fund, Performance Analysis of Mutual Fund, Equity

Hybrid Direct-Growth Scheme

INTRODUCTION:
A Mutual fund is an entity that pools the money of many investors and invests in
different securities. These investments may be in shares, debt securities, or money
market securities. This study attempts to consideration of investors while investing in
a mutual fund. Evaluating the historical performance of the mutual fund is important
for investors as well as portfolio managers. Investors expect consistent returns on
their investments. Selecting the best scheme is a crucial task for investors. This study
will provide some insights into the performance analysis of mutual funds which will
help them taking rational investment decisions and allocate their resources to the right
mutual fund schemes.

OBJECTIVES OF THE STUDY:

1. To understand the investment options available in a mutual fund with its risk
factors.
2. To evaluate the performance of the selected mutual fund schemes in India.
 3. To compare the performance analysis of selected mutual funds.
SCOPE OF THE STUDY:
Conceptual scope – The study is restricted to only five equity hybrid direct growth
mutual fund companies i.e. SBI, AXIS, HDFC, IDFC, and KOTAK equity hybrid
direct growth plan. Each scheme has been analysed according to its performance
against the other, based on factors like rate of returns, risk and volatility of the fund.
● To calculate the performance of the equity hybrid direct growth fund, an
aggressive hybrid benchmark was taken.
● In the study 10,000 Systematic Investment Planning (SIP) of the fund were taken.
● The data was limited to the performance of the mutual funds only for the period of
the last three years, from 1st January 2019 to 1st December 2020.

LIMITATIONS OF THE STUDY:

● The study was based on secondary data.
● The company’s performance of 3 years was during the period of COVID- 19 so
the market was volatile at that time that’s why there were more fluctuations in the
performance of the selected schemes.
REVIEW OF LITERATURE:
To provide the foundation for the present study, the research work done by different
researchers has been reviewed.
Choksi, Margi & Bhatt, Priyanka. (2021): In this research researcher has shown the
performance of selected 15 large cap mutual funds in India. And the performance has
been shown by various tools which are average return, standard deviation, beta, sharp
ratio, Jensen ratio and treynor ratio. The researcher has given some important findings
which are, that the highest returns are given by the top 100 equity mutual fund, ICICI
prudential blue-chip equity fund and LIC MF large-cap fund. This study has also
shown how funds were negatively affected during demonetization.
Naresh Chaudhar (2020): In this research paper, the researcher has shown the
performance of 10 hybrid mutual funds which were divided into two categories based
on their nature, one was aggressive and the second conservative hybrid mutual fund,
for the evaluation of fund financial ratio analysis was used. Tools used are sharp ratio,
standard deviation, Beta and Jenson’s alpha based on three years of data and the
researcher found market sentiments affect less in the conservative hybrid mutual fund
than the aggressive hybrid mutual fund. In this study, if we look at returns,
conservative mutual funds was giving more returns with low risk, and aggressive
mutual funds are giving negative returns with higher risk.
Muralidhar Prasad Ayaluru: In this research paper, the researcher has shown the
comparative performance of the top 10 reliance mutual fund and the comparative
study was based on the risk and returns given by these 10 funds. The study stated that
reliance on small-cap funds was having moderate risk with moderate returns.
Y. Maheswari: In this research paper, the researcher's motive was to support
investors to choose corrective investment options in the future. This study was to view
the money-related execution of a selected mutual fund scheme and the performance
parameters are beta, standard deviation, treynor measure, and sharp ratio.
Shivam Tripathi, Dr. Gurudutta P. Japee: In this research paper study was done on
equity mutual funds, this study shows the performance of selected large cap, mid cap,
small cap funds and open-ended fund schemes and also shows the risk and returns
relationship. To show the performance parameters used which were Jensen’s alpha,
beta, standard deviation, and sharp ratio. The study stated that from 15 funds 10 funds
performed well. This study will help investors with investment decisions also
researcher said that investors must have to consider the risk ratio at the time of
investment.
Dr Vikas Choudhary, and Preeti Sehgal Chawla: In this research paper, the
researcher has shown the performance of growth-oriented equity, diversified schemes
and the performance analysis parameters are average return, sharp ratio, treynor ratio,
standard deviation, beta and coefficient of determination(R). The study stated that in
the selected funds, the majority of the funds have given good performance in sharp
ration and treynor ratio.

 The existing research has shown the performance of various schemes in the
market and on which parameters investment needs to take for performance
analysis with that they had shown which schemes or funds are performed well.
The present study will guide investors on which parameters they need to choose
investment options. And the presented study also shows the investment as per risk
factors and the importance of a sharp ratio in investment.

RESEARCH METHODOLOGY:
● Research Design – In this study, a descriptive research method and a
quantitative approach were used.
● Method of Data Collection – In this study secondary data collection was
involved. Secondary information was collected from websites.
● Methods /tools or techniques used for data analysis – Tools used: average rate
of returns (XIRR), risk (standard deviation), sharp ratio, beta (slop) and alpha
(intercept).MS Excel was used for the tools used to calculate the performance of
the schemes.

CONCEPT OF MUTUAL FUND:

A mutual fund is pooled money of investors, who shares a common financial goal and
this money is managed by an Investment Company.
Types of mutual funds – These types are divided as per their risk
1. Equity or Growth Funds (high risk): This fund primarily invests in stock or
shares of different companies. This fund gives high returns by containing high risk
in the market. A fund will be considered an Equity fund if it has at least 65% of its
average net assets invested in equities.
2. Debt Funds (low risk): This fund invests in fixed interest-bearing instruments
such as government bonds, treasury bills, company debentures, corporate bonds,
money market instruments, and fixed-income securities or assets. This fund
contains less risk and also gives fewer returns than equity and hybrid funds.
3. Hybrid Funds (medium risk): The term hybrid itself suggests that this fund
invests both in Stocks and Bonds. Due to its investment patterns, it is called a
hybrid fund. Though this investment proportion between stocks and bonds may
vary from time to time as per the situation.
● Types of hybrid funds :
1. Equity-oriented hybrid funds – If the fund manager invests more than 65% of
the fund’s assets in equity and the rest in debt and money market instruments, then
it’s called an equity-oriented fund.
2. Debt-oriented balanced funds –A hybrid fund is termed a debt-oriented fund if
the fund manager allocates more than 65% towards debt instruments. The debt
component of the fund constitutes the investment in fixed-income such as
government securities, debentures, bonds, treasury bills, and so on.

DATA ANALYSIS & INTERPRETATION:

A. Comparison of five equity hybrid direct growth mutual fund schemes:

1. Returns comparison:
Equity Hybrid Direct Growth
FUNDS RETURNS
BENCHMARK 22.02%
SBI 22.48%
AXIS 25.70%
HDFC 23.19%
IDFC 20.72%
KOTAK 27.62%

It can be pointed out from the table and graph that benchmark returns were 22.02%.
27.62% was the highest return given by Kotak, and the lowest return was given by the
IDFC (20.72%). The returns given by Axis, SBI and HDFC schemes were 25.70%,
22.48% and 23.19% respectively. Out of these 5, mutual fund Axis was the second
highest scheme in returns.

2. Returns and risk comparison:

 Equity Hybrid Direct Growth
FUNDS RETURNS Standard Deviation
BENCHMARK 22.02% 0.051
SBI 22.48% 0.046
AXIS 25.70% 0.046
HDFC 23.19% 0.051
IDFC 20.72% 0.041
KOTAK 27.62% 0.053

The table and graph above indicate that the benchmark return was 22.02% with a risk
of σ 0.051. The highest returns were given by Kotak (27.62%) with the highest risk (σ
0.053). The returns given by IDFC were the lowest (20.72%) among all the schemes
with the lowest risk (σ 0.041). The returns given by SBI and Axis were 22.48% and
25.70% with a risk of σ 0.046. The returns given by HDFC was 23.19% with a risk of
σ 0.051.

3. Sharp Ratio comparison:

Equity Hybrid Direct Growth
FUNDS SHARP RATIO
BENCHMARK 4.36
SBI 4.92
AXIS 5.61
HDFC 4.56
IDFC 5.10
KOTAK 5.19

The sharp ratio shows the risk-adjusted performance of the scheme. The sharp ratio of
AXIS was 5.61 which was the highest compared to other schemes. The sharp ratio of
IDFC, SBI and KOTAK was 5.10, 4.92 and 5.19 respectively. The sharp ratio of
HDFC was lowest (4.56) as compared to other funds but higher than the benchmark
sharp ratio (4.36).

4. Beta comparison:
Equity Hybrid Direct Growth
FUNDS BETA
SBI 0.87
AXIS 0.87
HDFC 0.98
IDFC 0.77
KOTAK 1.02

Beta calculates the relative volatility of a mutual fund against the benchmark. In the
above graph, the beta of Kotak was 1.02 which was the highest as compared to other
funds. HDFC beta was 0.98 which was less than the Kotak beta (1.02) but it was more
than the SBI (0.87) and Axis (0.87). IDFC beta was lowest (0.77) than the other 4
mutual fund schemes.

5. Alpha comparison:
Equity Hybrid Direct Growth
FUNDS ALPHA
SBI 0.00209
AXIS 0.00358
HDFC -0.00001
IDFC 0.00055
KOTAK 0.00292

In these 5 funds, HDFC was giving the lowest alpha and it was negative (-0.00001)
but still, it was giving better risk-adjusted returns as compared to the benchmark.
IDFC was showing (0.00055) alpha. AXIS alpha was (0.00358) which was the
highest alpha as compared to the other 4 funds. Kotak's alpha was (0.000292) and SBI
was showing an alpha of (0.00209).

B. Comparative Performance Analysis of five Equity Hybrids Direct-Growth

schemes:

Interpretation –

The highest returns were given by Kotak schemes (27.62%) than the other funds but
also contained high risk (σ 0.053), the sharp ratio of the fund was 5.19 and the beta of
1.02 shows the fund was highly volatile in the market. The alpha of the fund was
0.00292.

The returns given by HDFC was 23% with high risk (0.051) than the other funds, the
sharp ratio of the fund was 4.56, and the alpha of the fund was negative (-0.00001).

The returns given by IDFC were the lowest (21%) among all the funds with low risk
(σ 0.041) and a sharp ratio was 5.10 which shows better risk-adjusted performance,
the beta of the fund was 0.77 and the alpha was 0.00055.
The returns given by Axis was 25.70% and SBI was 22.48% with the same risk (σ
0.046) Axis sharp ratio was 5.61 and SBI sharp ratio was 49.2, alpha of axis (0.00358)
was highest than the SBI (0.00209), Axis and SBI both the funds are containing the
same beta which was 0.87.

Kotak's scheme was highly risky with a beta of 1.02. But Kotak was giving higher
returns than the other funds which were 27.62%. The risk with σ 0.053 and a sharp
ratio was 5.19.

MAJOR FINDINGS
● In the individual comparison of schemes SBI, AXIS, HDFC and KOTAK were
giving the highest returns and better performance of sharp ratio as compared to the
benchmark (returns 22.02% and sharp ratio 4.36), but IDFC mutual fund was
giving fever returns than the benchmark.
● The highest returns are given by Kotak (27.62%). But when we compare these
returns with standard deviation (risk) and sharp ratio, the axis scheme was giving
a better performance of returns of 25.70% with 0.046 risks and the highest sharp
ratio of 5.61. But the beta of the axis was giving 0.87 which was showing the
highest volatility in the market as compared to a benchmark. The alpha of the fund
was 0.00358 which indicates that the fund was a better risk-adjusted return to
benchmark indices and it has performed well by providing a better return to the
investors.
● IDFC was giving 21% of returns with a risk of 0.041 which was fewer as
compared to others. And sharp ratio was 5.10 which are showing the good
performance of this fund. IDFC was giving the lowest alpha and it was negative (-
0.00001) but still, it was giving better risk-adjusted returns as compared to the
benchmark.
● If we compare the axis with SBI then the axis was better in performance than the
SBI because the axis was giving 25.70% of returns and SBI was giving 22.48% of
returns on the same risk of 0.046 and the axis was giving better performance in the
sharp ratio than the SBI, axis sharp ratio was 5.61 and SBI sharp ratio was 49.2
and beta of this funds was same but the alpha of the axis scheme was giving
better-adjusted returns than the SBI. But these 2 funds are more highly volatile in
the market than the benchmark.
● HDFC equity hybrid direct growth mutual fund was containing higher risk with
low returns than other funds.
● Kotak equity hybrid direct growth mutual fund was highly risky because this fund
was showing a beta of 1.02 which shows high volatility (aggressive hybrid).
Kotak returns are high 27.62% with a risk of 0.053 and sharp ratio performance
was 5.19.

SUGGESTIONS:
Suggestions to Investors-
● Investors suggested selecting the investment option on these five parameters and
also comparing the fund performance based on sharp ratio performance, as high as
the sharp ratio better the performance of the fund.
● Investors also suggested checking the performance against the market or
benchmark of the fund.
● Based on beta, alpha, standard deviation and rate of returns investors can choose
the investment option as per their investment behaviour like aggressive, moderate
and conservative. For example, aggressive investors can invest in Kotak in that
particular period.

CONCLUSION:
In this study, a performance analysis of five mutual fund schemes was undertaken
which are SBI, Axis, HDFC, IDFC, and Kotak equity hybrid direct growth mutual
fund schemes.
In this study secondary data has been used to calculate the performance of the
schemes. The performance was calculated with the help of excel tools. All the data
were compared based on 5 factors which are returns, risk, and volatility of mutual
funds in the market and performance of the mutual fund according to its benchmark.
The present study will guide investors on these five parameters they need to choose
investment options. Investors need to see the investment as per its risk factor and to
choose the fund of sharp ratio is very important to see the exact performance of the
fund at the time of investment.

REFERENCES
Research Papers:
 Ayaluru, M. (jan-June 2016). PerformanceAnalysis of Mutual Funds:Selected
Reliance Mutual Fund Schemes (Vol. 12(I)). Parikalpana - KIIT Journal of
Management.

 Chaudhari, N. (020/12/12). PERFORMANCE EVALUATION OF SELECTED

HYBRID MUTUAL FUNDS IN INDIA (Vol. III ISSUE III). GAP
iNTERDISCIPLINARITIES .

 DR.Vikas choudhary, P. S. (n.d.). Performance Evaluation of Mutual Funds:A Study

of Selected Diversified Equity Mutual Funds in India.
  Maheswari, Y. (18 Nov 2021). Performance Evaluation of Select Mutual Funds in
India.

 Margi Choksi, P. B. (2020). PERFORMANCE ANALYSIS OF MUTUAL FUNDS:

A STUDY ON SELECTED LARGE CAP MUTUAL FUNDS IN INDIA. Sambodhi,
Vol-43 (No.-04 (XXIV)), 53-57.

 Shivam Tripathi, D. G. (23 Jul 2020). Performance Evaluation of Selected Equity

Mutual Funds in India (Vols. 3- ISSUE I). GAP GYAN - A GLOBAL JOURNAL
OF SOCIAL SCIENCES, 2020.

E-sources:
● https://www.advisorkhoj.com
● https://www.moneycontrol.com
SUMMARY OF THE ABBREVIATION:
SR.NO Abbreviation Word and Phrase
1 SBI State Bank of India
2 Axis Axis bank
3 HDFC Housing Development Finance Corporation
4 IDFC Infrastructure Development Finance Company
5 Kotak Kotak Mahindra bank
6 SIP Systematic Investment Plan
Symbol
High
Middium
Low