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Project report

(Submitted for the degree of B.Com Honors’ in Accounting & Finance under the
University of Calcutta)

ON

RISK AND RETURN ANALYSIS OF


SELECTED MUTUAL FUND

Submitted By

Name of the Candidate: Arashad Khan

Registration No.: 145-1115-0460-21

University Roll No.: 211145-21-0240

College Roll No.: 244

Name of the College: Goenka College Of Commerce And Business


Administration

Supervised By

Name of the supervisor: Dr. Runa Roy

Name of the College: Goenka College Of Commerce And Business


Administration

MONTH & YEAR OF SUBMISSION: July, 2024

1
SUPERVISOR’S CERTIFICATE

This is to certify Arashad khan a student of B.Com Honours in


Accounting & Finance of Goenka college of commerce and BA
under the University of Calcutta has worked under my supervision
and guidance for his project work and prepared a project report with
the title:RISK AND RETURN ANALYSIS OF SELECTED
MUTUAL FUNDS. The project report, which he is submitting, is his
genuine and original work to the best of my knowledge.

DATED: SIGNATURE:

KOLKATA PROF: Dr. Runa Roy

*Designation*

Name of the college: Goenka College of


commerce and BA

2
STUDENT’S DECLARATION

I hereby declare that the project work with the title:RISK AND
RETURN ANALYSIS OF SELECTED MUTUAL FUNDS
submitted by me for the partial fulfillment of the degree of B.com
Honors in Accounting &Finance in business under the University of
Calcutta is my original work and has not been submitted earlier to any
other University / Institution for the fulfillment of the requirement for
any course of study. I also declare that no chapter of this manuscript
in whole or in part has been incorporated in this report from this any
work done by other or by me. However extracts of my literature
which has been used for thus report has been duly acknowledge
providing details of such literature in the references.

Place: KOLKATA Signature:

Date: Name: Arashad khan

Address:

Registration No: 145-1115-0460-21

3
ACKNOWLEDGEMENT

I have taken efforts in this project. However, it would not


have been possible without the kind support and help of many
individuals. I would like to extend my sincere thanks to all of
them.
I am highly indebted to my teachers and project supervisor for
their guidance and regarding the project & also for their
support in completing constant supervision as well as for
providing necessary information the project.
I would like to express my gratitude towards my parents,
friends and brother for their kind co-operation and
encouragement which helped me in completion of this project.
I thank you one and all.

Signature of student

Table of Content
4
TOPIC Page no.
1.Introduction 1.1 Overview of 6-8
mutual fund industry
1.2 Concept of equity 9
mutual fund
1.3 Current scenario 9-10
2. Need of the study 2.1 Scope of the 11-12
study
2.2 Justification for 12
the study
2.3 Significance of the 12
study
3.Literature Reviews 13-15
4. Research gap 15
5.Objectives of the 15
study
6.Research design & 16-17
methodology
Conceptual 18-27
Framework
7. Findings and 28-37
Observations
8.Conclusions 38
Bibliography 39-40

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INTRODUCTION
Investment is the process of allocating money or resources with the expectation
of generating future income or profit. It involves purchasing assets, such as
stocks, bonds, real estate, or commodities, with the goal of earning a return on
the invested capital over time. Investing involves assessing risks and potential
rewards. Different types of investments carry varying degrees of risk, with
higher-risk investments typically offering the potential for greater returns.
It's important for investors to carefully evaluate their risk tolerance,
investment goals, and time horizon when making investment decisions.
Investment avenues refer to the different options or channels available to
individuals for investing their money or resources with the aim of generating
future income or profit. These avenues encompass a range of financial
instruments, assets, or vehicles through which individuals can allocate their
funds based on their investment goals, risk tolerance, and preferences.
Investment avenues serve as pathways for individuals to put their capital to
work in the hopes of achieving financial objectives, such as wealth
accumulation, income generation, or capital appreciation. The choice of
Investment Avenue depends on factors such as the desired level of risk,
expected returns, investment horizon, and personal circumstances. . Investment
avenues, such as stocks, bonds, mutual funds, real estate, and commodities, are
specific types of assets in which individuals can invest. Mutual funds are one of
the most favoured investment avenues due to many reasons. Mutual Funds are
issued by organizations set up as trusts that sell units to the general public or a
specific segment of the public as part of one or more investment plans
for assets, including money market instruments (Desai, 2010). The mutual
fund industry in India is growing swiftly as a result of the country's
speedy infrastructural development, rising personal financial assets, and more
foreign investment. Due to India's growing risk appetite, increasing income,
and increased awareness, mutual funds are becoming a more popular
option for investors. Indian Mutual fund industry has developed
overwhelmingly in the last few decades. Investments in mutual funds are
primarily made with the intention of minimizing risk for the desired
return. This is accomplished via the use of professional experience, asset
classification, and diversification strategies in the selected portfolio.

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1.1 Overview of Mutual Fund Industry

In 1822, Belgium became the first country to provide investing mutual funds.
This type of investment quickly became popular in France and Great Britain. In
the United States, mutual funds first gained popularity in 1920s and have
remained so throughout the 1930s, particularly open-end mutual funds. The
mutual fund business kept growing. At the start of the 1950s, there were more
than 100 open-ended funds. The mutual fund sector started to expand seriously
in 1954, adding over 50 new funds over the course of the following ten years. A
hundred or more new funds were launched throughout the 1960s, and fresh
assets worth billions of dollars were brought into the market. On the initiative of
the Indian Government and Reserve Bank, Unit Trust of India was established
in the year 1963, marking the beginning of the mutual fund sector in
India. Development of the mutual fund industry in India can be
categorized into four major phases:(Association of Mutual Funds in
India2022)

1.1.1 First Phase (1964-87)


A parliamentary act formed Unit Trust of India (UTI) in 1963. It was
established by the Reserve Bank of India and operated under its administrative
and regulatory supervision. The Industrial Development Bank of India (IDBI)
replaced the RBI as the regulatory and administrative authority of UTI in 1978
when it was delinked from the RBI. Unit Scheme introduced by UTI in 1964
was its initial programme. UTI managed assets worth Rs. 6,700 crores by the
end of 1988.

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


Non-UTI public sector mutual funds were introduced in 1987 and were created
by Public Sector Banks, Life Insurance Corporation of India (LIC), and
General Insurance Corporation of India (GIC). The first non-UTI mutual fund
was formed by SBI in June 1987. This was followed by Canbank in December
1987, Punjab National Bank in August 1989, Indian Bank in November 1989,
Bank of India in June 1990, and Bank of Baroda in October 1992. While GIC
had formed its mutual fund in December 1990, LIC had done so in June 1989.

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The mutual fund sector managed assets worth Rs. 47, 004 crores by the end of
1993.

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

The 1993 introduction of private sector funds into the Indian capital markets
opened the door for a flood of retail investments. The mutual fund sector in
India entered a new phase, offering Indian investors a larger selection of fund
families. The first Mutual Fund Regulations, which required all mutual funds,
with the exception of UTI, to be registered and controlled, were also established
in 1993. The first private sector mutual fund was formed in July 1993 under
the name Kothari Pioneer, which has now amalgamated with Franklin
Templeton. In 1996, a new and expanded version of the Mutual Fund
Regulations replaced the 1993 SEBI (Mutual Fund) Regulations. The SEBI
(Mutual Fund) Regulations of 1996 presently govern how the sector operates.
As more global mutual fund companies opened funds in India and as the sector
underwent several mergers and acquisitions, the number of mutual fund firms
continued to rise. There were 33 mutual funds with a combined asset value of
Rs. 1, 21,805 crores as of the end of January 2003. With Rs. 44, 541 crores in
assets under management, The Unit Trust of India was well ahead of rival
mutual funds.

1.1.4 Fourth Phase – (February 2003 and onwards)

After the Unit Trust of India Act of 1963 was repealed in February 2003, UTI
was divided into two distinct organizations. One is the Specified Undertaking of
the Unit Trust of India, which as of the end of January 2003 had assets under
management of Rs. 29, 835 crores, about equivalent to the assets of the US 64
plan, guaranteed return, and a few other schemes. The Unit Trust of India's
Specified Undertaking, which operates under an administrator in
accordance with regulations set forth by the Indian government, is not
covered by the Mutual Fund Regulations. The UTI Mutual Fund, sponsored by
SBI, PNB, BOB, and LIC, is the second. It operates in accordance with the
Mutual Fund Regulations and is registered with SEBI. The mutual fund
business has entered the present era of consolidation and expansion with the
split of the former UTI and the establishment of a UTI Mutual Fund in
compliance with the SEBI Mutual Fund Regulations, as well as with recent
mergers taking place among other private sector funds.

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1.2 Concept of Equity Mutual Fund

Equity Mutual Fund Schemes are investment funds that primarily invest in the
stock market, targeting equity shares of companies. These funds pool money
from various investors and are managed by professional fund managers, who
make strategic investment decisions to generate returns for the investors. Equity
Mutual Funds are mandated to invest at least 65% of their total assets in equities
and equity-related instruments. This includes investments in stocks of
companies listed on stock exchanges and equity derivatives. Equity Fund
Categories as per SEBI guidelines on categorization and rationalization of
schemes:

Large-Cap Funds:Large-cap Equity Mutual Funds are mandated to invest at


least 80% of their total assets in the stocks of large-cap companies. Large-cap
companies are those that rank among the top 100 companies in terms of market
capitalization.

Mid-Cap Funds: Mid-cap Equity Mutual Funds are mandated to invest at least
65% of their total assets in the stocks of mid-cap companies. Mid-cap
companies are those that rank between 101st and 250th in terms of market
capitalization.

Small-Cap Funds: Small-cap Equity Mutual Funds are mandated to invest at


least 65% of their total assets in the stocks of small-cap companies. Small-cap
companies are those that rank below the top 250 companies in terms of market
capitalization (Association of Mutual Funds in India 2017)

1.3 Current Scenario


The Indian mutual fund industry has emerged as one of the rapidly expanding
sectors in the Indian capital and financial markets. In recent years, there have
been significant advancements in the range and quality of products and
services offered by mutual fund companies. The popularity of mutual funds
as an investment vehicle has surged, leading to substantial growth in Assets
under Management (AUM). Since its establishment in 1963, the Indian mutual
fund industry has experienced remarkable progress and expansion. The mutual
fund AUM surpassed Rs 10 lakh crore for the first time in May 2014 and Rs 20

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lakh crore in August 2017. As of 31st January 2024, the mutual fund industry
AUM stands at Rs 52.74 lakh crore a 6 fold growth in 10 years. The number of
folios crossed a milestone of 10 crore in May 2021, and as of 31st January 2024
stands at 16.96 crore (source – AMFI).

The ease, convenience, and low entry barriers (as low as Rs 100!) in mutual
funds through SIP have made investing accessible to a wider audience. SIP
accounts crossed the milestone of 1 crore in April 2016, and as of 31 January
2024, the number of SIP accounts is at 7.92 crore. Furthermore, the mutual fund
industry is expected to cross an AUM of Rs 100 lakh crore and onboard 10
crore investors in the next decade (Source - AMFI).

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2 Need of the study

Equity mutual fund schemes are investment funds that primarily invest
in stocks or equities of different companies. Equity mutual funds provide
investors with an opportunity to participate in the potential growth of the stock
market while diversifying their investments across a range of companies and
sectors. By analyzing the risk and return characteristics of different equity
mutual fund schemes, investors can make informed investment decisions. They
can assess the potential returns they can expect from a particular fund and
evaluate the level of risk associated with it. This analysis helps investors align
their investment objectives and risk tolerance with suitable mutual fund
schemes. Risk and return of equity mutual funds allows investors to compare
different schemes within the same category. It helps them identify funds that
have consistently delivered better returns relative to their risk levels and those
that have managed risk more effectively.

The study evaluates the performance of the equity mutual fund schemes so
that the investors are able to understand the relationship of risk and return when
taking the decisions of investing in equity mutual fund schemes. Further the
investors can get a better insight about investing in equity mutual fund schemes
through the results of the study. Furthermore the asset management companies
can also be benefited through the results of the study. The results can also help
the policy formulators forming policies for mutual fund schemes.
Understanding and assessing the risks associated with mutual funds is crucial
for making informed investment decisions. It’s important to note that mutual
funds offer varying degrees of risk based on their investment objectives, asset
allocation, and investment strategies. Investors should carefully assess their risk
tolerance, investment goals, and time horizon when selecting mutual funds.
Diversification across different types of mutual funds can help manage risk by
spreading investments across various asset classes and market segments.

2.1 Scope of the Study

This study will focus on LCFs in India with a minimum asset base of INR 10 billion. The
study will analyse quantitative data on performance metrics like returns, beta, Sharpe ratio,
Treynor ratio, Jensen alpha for a period of four years.

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2.2 Justification for the Study

This study aims to address the aforementioned business problem by conducting a


comprehensive performance analysis of selected LCFs in India. The key objectives of this
study are:
2.2.1 For Investors:
 Identify high-performing LCFs: Analyse risk-adjusted returns, Sharpe Ratio, and
consistency of performance over different market cycles to identify top-performing
LCFs.
 Gain insights into investment strategies: Understand the fund management styles,
asset allocation, and portfolio composition of different LCFs.
 Evaluate suitability based on risk tolerance: Analyse risk metrics like standard
deviation and beta to assess the suitability of LCFs for different risk profiles.

2.2.2 For Fund Managers:


 Benchmark performance: Evaluate the performance of their LCFs against peers and
industry benchmarks to identify areas for improvement.
 Develop effective communication strategies: Translate complex performance data
into easily understandable information for investors.
 Tailor investment strategies: Gain insights into investor preferences and tailor
investment strategies to attract and retain specific investor segments.

2.3 Significance of the Study


This study will contribute significantly to the mutual fund industry by:
 Providing investors with a valuable tool for making informed investment decisions.
 Enhancing the transparency and accountability of LCF performance evaluation.
 Enabling fund managers to improve their investment strategies and attract a wider
investor base.
 Promoting the development of a more efficient and investor-centric mutual fund
industry in India.

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3. Literature Reviews:
Singh, P. (2022) examines the performance of Indian large-cap mutual funds (LCFs)
through quantitative analysis of risk-adjusted returns. Existing research analysed LCF
performance using similar metrics. This paper aims to expand on their work by
incorporating additional risk measures and exploring the influence of fund manager
styles.

Ayaluru, M. P. (2016) aims to fill the gap by providing a comprehensive performance


analysis of selected Reliance Mutual Fund schemes. It will expand on existing research
by incorporating additional factors like fund management styles, expense ratios, and
market trends to provide a more nuanced understanding of performance drivers. This will
contribute to the existing body of knowledge by offering valuable insights for investors
seeking to invest in Reliance Mutual Fund schemes.

Ali, M. M. M. (2022) aims to address the gap of lacking deeper analysis of the factors
influencing performance by incorporating additional risk metrics and exploring the
impact of crucial factors like fund size, manager styles, market cycles, and investor
behaviour on performance. By providing a more comprehensive and nuanced
understanding, this study will benefit investors in making informed investment decisions
and empower fund managers to tailor their strategies for optimal performance in the
dynamic Indian market.

Chaudhari, N. (2020) aims to analyse the performance of selected hybrid mutual funds
in India. Through a comprehensive evaluation of risk-adjusted returns, portfolio
composition, and fund management styles, this research seeks to identify high-performing
hybrid funds and provide valuable insights for investors seeking a balanced approach to
investment. Additionally, the study investigates the impact of market trends on hybrid
fund performance, offering valuable information for investment strategy development in a
dynamic market landscape.

Krishnamoorthi, M., & Murugesan, T. K. (2018) examines the performance of specific


mutual fund schemes within the Indian market. Through a comprehensive evaluation, the
study investigates the inherent risks associated with these schemes and analyses the
corresponding returns. By focusing on the unique characteristics of the selected funds, the

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paper contributes valuable insights into the dynamics of the Indian mutual fund industry,
aiding investors in making informed decisions.

Kaur, K. (2021) explores the correlation between the longevity of mutual fund schemes
and their performance. By examining data specific to the Indian context, the study aims to
determine whether extended existence positively influences fund performance. The
investigation contributes valuable insights into the dynamics of mutual fund schemes in
the Indian financial landscape, shedding light on the potential impact of longevity on their
overall success.

Maheswari, R., & Dineshkumar, R. (2019) aims to examine the financial performance
of Axis Mutual Fund. Through comprehensive analysis, the paper evaluates various
factors influencing the fund's performance, such as market conditions and investment
strategies. The study contributes valuable insights into the fund's strengths and areas for
improvement, offering investors and stakeholders a nuanced understanding of its overall
performance.

Gami, P. (2020) examines the diverse elements influencing the performance of equity
mutual funds. Through meticulous examination, the study explores the intrinsic factors
impacting these funds, shedding light on their intricate dynamics. The findings contribute
valuable insights to the understanding of equity mutual fund performance, offering a
comprehensive perspective on the multifaceted variables at play within this financial
domain.

Roy, S. (2014) investigates the operational effectiveness of mutual funds in the Indian
market. Employing empirical methods, the study assesses the financial performance and
management strategies of mutual funds. Through a comprehensive analysis, the paper
aims to provide insights into the overall effectiveness of mutual funds as investment
vehicles in the specific context of the Indian financial landscape.

Choudhary, I. R., Nigam, P., & Sayyed, A. (2020) examines the efficacy of various
Indian mutual fund schemes. Through a meticulous analysis of financial indicators and
market trends, the study assesses the relative performance of these schemes. The findings
contribute valuable insights into the investment landscape, aiding investors in making
informed decisions. The paper's methodology involves a comprehensive examination of

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historical data and financial metrics, providing a nuanced understanding of mutual fund
performance within the Indian market.

Mathur, P. (2021) investigates the performance of multi-cap and large-cap mutual funds
in India between 2013 and 2018. The study analyzes ten prominent funds from each
category and compares their returns to the BSE 200 and Nifty 500 indexes. While the
research found both categories generated good returns with reasonable risk, there were no
statistically significant differences in performance between multi-cap, large-cap, or the
benchmark indexes.

4. Research Gap:

The existing literature primarily focuses on analysing the performance of Indian mutual
funds, often employing similar metrics. However, a notable research gap exists in the
comprehensive examination of risk-adjusted returns, incorporating additional risk measures
beyond those traditionally used. This study aims to bridge this gap by specifically delving
into the performance of selected large-cap mutual funds and extending the analysis to include
beta, standard deviation, Sharpe ratio, Treynor ratio, and Jensen alpha. This approach
provides a more understanding of fund performance, thereby enhancing the depth of research
in this domain.

5. Objectives of the study

i. To evaluate the performance of the selected mutual fund schemes in India.


ii. To examine the risk and return relationship of the selected mutual funds.

6. Research Design & Methodology

To assess the performance of selected mutual fund schemes, this study includes 5 large cap
mutual funds and were chosen at random basis:

i. Nippon India Large Cap Fund


ii. ICICI Prudential Bluechip Fund

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iii. Edelweiss Large Cap Fund
iv. Canara Robeco Bluechip Equity Fund
v. Tata Large Cap Fund

The study covers a period of five years from January 2018 to December 2022. The data so
collected has been tabulated and analyzed with the help of MS Excel. The most popular index
BSE-Sensex is used as the benchmark for the study. The yield of 91-day Treasury bills is
used as the risk-free rate of return for the study. The study is analytical in nature, and it was
mainly focused on secondary data available on Yahoo finance and Asset Management
Companies (AMCs).

Methods for analysis:

The various statistical tools used for the study are average, standard deviation and percentage.

The performance measures used are:

i. Sharpe ratio:
 The Sharpe Ratio defines the risk in terms of standard deviation, which is a measure
of total risk. Hence, it includes both systematic as well as unsystematic risk.


 The high and positive ratio shows the better risk-adjusted performance of a fund,
while a low and negative ratio indicates the unfavourable performance.

ii. Treynor ratio:


 The Treynor ratio is an extension of the Sharpe ratio that, instead of using total risk,
uses beta or systematic risk in the denominator. As such, this is better suited to
investors who hold diversified portfolios.

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 The fund with higher ratio is desirable as it earns a higher risk premium per unit of
systematic risk.

iii. Jensen Alpha:


 Jensen’s Alpha is based on systematic risk. The difference between the actual return
of the portfolio and the calculated or modelled risk-adjusted return is a measure of
performance relative to the market.

 A positive alpha represents the over performance of the fund while the negative alpha
represents the under performance of the fund.

iv. Beta:
 The beta of a mutual fund is the measure of relative risk, expressed as number; Beta
can take any value above or below zero. Beta gives us a perspective of the relative
risk of the mutual fund.


 The mutual fund schemes with higher beta value are mostly opted by the aggressive
investors as it represents higher returns with higher risk.

v. Standard Deviation:
 The standard deviation of a stock or a mutual fund represents the riskiness of the
stock or the mutual fund. Standard Deviation is a percentage, expressed as an
annualised figure.


 The fund with higher standard deviation indicates that the net asset value is more
volatile, thus considered being risky than a fund with low standard deviation.

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Conceptual Framework

What is Mutual Fund?


A mutual fund is a trust that pools the savings of a number of investors who share a common
financial goal and investments may be in shares, debt securities, money-market securities or a
combination of these. Those securities are professionally managed on behalf of the unit
holders and each investor holds a pro-rata share of the portfolio, that is, entitled to profits as
well as losses.
Income earned through these investments and the capital appreciation realized is shared by its
unit holders in proportion to the number of units owned by them. A mutual fund is the most
suitable investment scope for common people as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively lower cost.
The flow chart below describes broadly the working of a Mutual fund:

A mutual fund is an investment vehicle in which a pool of investors collectively put forward
funds to an investment manager to make investments on their behalf. The fund is regulated
by the Securities Exchange Commission, or SEC.When involved with a mutual fund, each
investor benefits proportionally to the amount of money they invested. Mutual funds may
invest in stocks, bonds, money market instruments, or other assets.
Depending on the vehicle of investment and redemption patterns, mutual fund investment can
offer tax benefits.The advantages of mutual funds are the ability to diversify a portfolio
across industries, low fees, and availability of professional expertise in the guise of fund
managers.The disadvantages of mutual funds are that they do not provide ownership of
underlying holdings to investors; hence, investors do not have much say on the composition
and constituents of mutual funds.
Mutual funds are also more expensive and riskier as compared to index funds.

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Organisation of a mutual fund
Sponsor
Sponsor is the person who either alone or in association with another corporate body,
establishes a mutual fund. The sponsor must contribute at least 40% of the net worth of the
investment managed and meet the eligibility criteria prescribed under the Securities and
Exchange Board of India (Mutual Funds) Regulations, 1996.The sponsor is not responsible or
liable for any loss or shortfall resulting from the operation of the schemes beyond the initial
contribution made by it towards setting up of the mutual fund

Trust
The mutual fund is constituted as a trust in accordance with the provisions of the Indian
Trusts Act, 1882 by the sponsor. The trust deed is registered under the Indian Registration
Act, 1908.

Trustee
Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals).
The main responsibility of the trustee is to safeguard the interest of the unit holders and inter
alias ensure that the AMC functions in the interest of investors and in accordance with the
Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of
the trust deed and the offer documents of the respective schemes. At least 2/3rd of the
directors of the Trustee are independent directors who are not associated with the sponsor in
any manner.

Asset Management Company (AMC)


The trustee, as the investment manager of the mutual fund, appoints the AMC. The AMC is
required to be approved by the Securities and Exchange Board of India (SEBI) to act as an
asset management company of the Mutual fund. At least 50% of the directors of the AMC are
independent directors who are not associated with the sponsor in any manner. The AMC must
have a net worth of at least Rs. 10 crore at all times.

Custodian
A trust company, bank or similar financial institution, registered with SEBI is responsible for
holding and safeguarding the securities owned within a mutual fund. A mutual fund’s
custodian may also act as its transfer agent.

Registrar and Transfer Agent


The AMC, if so authorized by the trust deed, appoints the registrar and transfer agent to the
mutual fund. The registrar processes the application form, redemption requests and
dispatches account statements to the unit holders. The registrar and transfer agent also
handles communication with investors and updates investor records.

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Basics of mutual funds
Mutual funds can be a good opportunity for small or individual investors to benefit from a
professionally managed investment portfolio.

They usually invest in a large number of securities, and their performance is tracked as the
change in the market cap of the fund, which itself is determined by the performance of the
underlying investments.

Mutual funds charge a sales commission, known as load, as well as management


fees related to the fund’s administration. While all funds charge management or
administration fees, there are funds in the market that are no-load, meaning they do not
charge a sales commission.

The returns of a mutual fund are based on the performance of its constituents. Therefore, skill
and expertise is required to pick equities that provide desired returns. Highly-trained
professionals function as fund managers for mutual funds.

You can use fund rankings issued by research firms like Morningstar and Standard & Poor to
select funds. Buying shares of a mutual fund does not give investors voting rights in a
company; instead the fund manager votes on their behalf.

However, since mutual funds generally incorporate hundreds of different securities, it does
give investors the benefit of diversification of their portfolios.

The value of a share of mutual fund is called the net asset value per share, or the NAV. The
price is determined by taking the net value of all the securities in the fund and dividing by the
outstanding shares.

Mutual funds can be open-ended or closed-ended. An open-ended mutual fund issues an


unlimited number of shares in the open market and redeems them at market value from
investors.

The share price of an open-end fund is based on the net asset value of its constituents.
Closed-end mutual funds function in the opposite manner i.e., they issue a fixed number of
shares and redemption is not allowed.

Instead, the only way for an investor to “redeem” a share is by selling it to someone else.

Therefore, their price is based on the dynamics of supply and demand and they always trade
at a discount to the net asset value of their constituents.

Regulatory Authorities

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SEBI
To protect the interest of investors, SEBI formulates policies and regulates the mutual funds.
It notified regulations in 1993 (fully revised in 1996) and issues guidelines from time to time.
Mutual funds, either promoted by public or by private sector entities including one promoted
by foreign entities, are governed by these regulations.

Types of Mutual Funds Schemes


There exist various mutual fund schemes to cater to the needs such as financial position, risk
tolerance and return expectations etc.
The content below gives an overview of the existing types of mutual fund schemes in the
industry.

 By Structure

Open-Ended Schemes
Open-ended schemes are mutual funds that can issue and redeem their shares at any time.
Open-ended funds do not have restriction on the amount of shares the fund will issue. They
offer units for sale without specifying any duration for redemption. If demand is high enough,
the fund will continue to issue shares, no matter how many investors are there. Open-ended
funds also buy back shares when investors wish to sell. Investors can conveniently buy and
sell units of open-ended funds directly from the fund house at the prevalent Net Asset Value
(NAV) prices. One of the key features of open-end schemes is the liquidity that these funds
offer to investors.

Close-Ended Schemes
Close-ended schemes are mutual funds with a fixed number of shares (or units). Unlike open-
ended funds, new shares/units are not created by managers to meet demand from investors
but the shares can only be purchased (and sold) in the secondary market.
Close-ended funds raise a fixed amount of capital through a New Fund Offer (NFO). The
fund is then structured, listed and traded like a stock, on a stock exchange. The price per
share is determined by the market and is usually different from the underlying value or net
asset value (NAV) per share of the investments held by the fund. The price is said to be at a
discount or premium to the NAV when it is below or above the NAV, respectively. A
premium might be due to the market's confidence in the investment manager’s ability to
produce above-market returns. A discount might reflect the charges to be deducted from the
fund in future by the fund managers.
Some close-ended funds give an option of selling back the units to the mutual fund through
periodic repurchase at NAV related prices. SEBI regulations stipulate that at least one of the
two exit routes is provided to the investor, that is, either repurchase facility or through listing
on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.

Interval Schemes
Interval schemes are those that combine the features of both open-ended and close-ended
schemes. The units may be traded on the stock exchange or may be open for sale or
redemption during pre-determined intervals at NAV-related prices.

21
 By Investment objective:

Growth or Equity-Oriented Schemes


The aim of growth funds is to provide capital appreciation over medium to long- term. These
schemes normally invest a major part of their portfolio in equities and have comparatively
high risks. They provide different options to the investors like dividend option, capital
appreciation, etc. and investors may choose one depending on their preferences. The mutual
funds also allow the investors to change the options at a later date. Growth schemes are good
for investors having a long-term outlook seeking appreciation over a period of time.
It can be further classified into following depending upon objective:

 Large-Cap Funds: These funds invest in companies from different sectors. However, they
put a restriction in terms of the market capitalization of a company, i.e., they invest largely
in BSE 100 and BSE 200 Stocks.
 Mid-Cap Funds: These funds invest in companies from different sectors. However, they
put a restriction in terms of the market capitalization of a company, i.e., they invest largely
in BSE Mid Cap Stocks.
 Sector Specific Funds: These are schemes that invest in a particular sector, for example,
IT.
 Thematic: These schemes invest in various sectors but restrict themselves to a particular
theme e.g., services, exports, consumerism, infrastructure etc.
 Diversified Equity Funds: All non-theme and non-sector funds can be classified as equity
diversified funds.
 Tax Savings Funds (ELSS): Investments in these funds are exempt from income tax at the
time of investment, upto a limit of Rs 1 lakh.

Income or Debt oriented Schemes


The aim of income funds is to provide regular and steady income to investors. These schemes
generally invest in fixed-income securities such as bonds, corporate debentures, Government
Securities and money-market instruments and are less risky compared to equity schemes.
However, opportunities of capital appreciation are limited in such funds. The NAVs of such
funds are impacted because of change in interest rates in the economy. If the interest rates
fall, NAVs of such funds are likely to increase in the short run and vice versa. However,
long-term investors do not bother about these fluctuations.

Balanced Schemes
The aim of the balanced funds is to provide both growth and regular income as such schemes
invest both in equities and fixed income instruments in the proportion indicated in their offer
documents. These are appropriate for investors looking for moderate growth. They generally
invest between 65% and 75% in equity and the rest in debt instruments. They are impacted
because of fluctuation in stock markets but NAVs of such funds are less volatile compared to
pure equity funds.

Money Market or Liquid Funds


These funds are also income funds and their aim is to provide easy liquidity, preservation of
capital and moderate income. These schemes invest exclusively in safer short-term

22
instruments such as Treasury Bills, Certificates of Deposits, Commercial Paper and inter-
bank call money, Government Securities, etc. Returns of these schemes fluctuate much less
than other funds. These are appropriate for investors as a means of short-term investments.

Gilt Funds
These funds invest exclusively in Government Securities. NAVs of these schemes also
fluctuate due to change in interest rates and other economic factors as is the case with income
or debt-oriented schemes.

Fund of Funds Schemes


Fund of Funds invests in other mutual fund schemes. A traditional mutual fund comprises a
portfolio of shares, but a Fund of Funds comprises a portfolio of different mutual fund
schemes. A Fund of Funds helps the investor to reduce his chances of selecting the wrong
mutual fund.

Gold Exchange Traded Funds


It is an open-ended Exchange Traded Fund. The investment objective of the scheme is to
generate returns that are in line with the returns on investment in physical gold, subject to
tracking error.

Floating Rate Funds


These are open-ended income schemes seeking to generate reasonable returns with
commensurate risk from a portfolio which comprises floating rate debt instruments and fixed
rate debt instruments swapped for floating rate returns. The scheme may also invest in fixed
rate money market and debt instruments

 Other schemes:

Tax-saving schemes
These schemes offer tax rebates to the investors under specific provisions of the Income Tax
Act, 1961 as the Government offers tax incentives for investment in specified avenues like
Equity Linked Savings Schemes (ELSS). ELSS is a type of diversified equity mutual fund,
which is qualified for tax exemption under Section 80C of the Income Tax Act, and offers the
twin-advantage of capital appreciation and tax benefits. It comes with a lock-in period of
three years.
The Rajiv Gandhi Equity Savings scheme (RGESS), which was revised in the Union Budget
2013-14, would provide a 50% tax deduction on investments up to Rs. 50,000 to first time
investors in equity whose annual taxable income is below Rs. 12 lakh.

Index Schemes
Index funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P
NSE 50 index (Nifty), etc. NAVs of such schemes would rise or fall in accordance with the
rise or fall in the index, though not exactly by the same percentage due to some factors
known as "tracking error". Necessary disclosures in this regard are made in the offer
document of the scheme.

23
There are also exchange traded index funds launched by the mutual funds which are traded
on the stock exchanges.

Sector Specific schemes


These are the funds which invest in the securities of only those sectors or industries as
specified in the offer documents like Pharmaceuticals, Software, FMCG, Petroleum stocks
etc. The returns of these funds are dependent on the performance of the respective
sectors/industries. While these funds may give higher returns, they are more risky compared
to diversified funds. Investors need to keep a watch on the performance of those
sectors/industries and must exit at an appropriate time.

Load or No-Load Funds


A load fund is one that charges a percentage of NAV for exit. That is, each time one sells
units in the fund, a charge will be payable. This charge is used by the Mutual fund for
marketing and distribution expenses.
A no-load fund is one that does not charge for exit. It means the investors can exit the fund at
no additional charges during sale of units. In accordance with the SEBI circular no.
SEBI/IMD/CIR No.4/168230/09 dated June 30, 2009, no entry load will be charged for
purchase / additional purchase / switch-in accepted by the fund with effect from August 1,
2009. Similarly, no entry load will be charged with respect to applications for registrations
under Systematic Investment Plan/ Systematic Transfer Plan / Systematic Investment Plan
Plus accepted by the fund with effect from August 1, 2009.

Dividend Payout Schemes


Mutual Fund companies as when they keep on making profit, distribute a part of the money
to the investors by way of dividends. If one wants to keep on taking part of profit regularly,
he may select this option.

Dividend Reinvestment Schemes


This option is similar to the first option except that the dividend declared is re-invested in the
same fund on the same day’s NAV.

Types of Returns
Following are the ways by which returns can be realized in a mutual fund:
Dividends
Unit holders earn dividends on mutual funds. These dividends are distributed from the
income generated through dividends on stocks and interest on other instruments.

24
Capital Gains
Investors get capital gains on mutual funds. If the fund sells securities that have appreciated
in value, it earns capital gains. Most funds distribute these capital gains also to investors
Profit from higher NAV
Any increase in value of fund’s asset increases the NAV of the fund. Investors can make
profit by selling back their units to fund house.

Advantages of investing in Mutual Funds


Professional Management
Mutual funds employ experienced and skilled professionals who make investment research
and analyze the performance and prospects of various instruments before selecting a
particular investment. Thus, by investing in mutual funds, one can avail the services of
professional fund managers, which would otherwise be costly for an individual investor.

Diversification
Diversification involves holding a wide variety of investments in a portfolio so as to mitigate
risks. Mutual funds usually spread investments across various industries and asset classes,
constrained only by the stated investment objective. Thus, by investing in mutual funds, one
can avail the benefits of diversification and asset allocation without investing a large amount
of money that would be required to create an individual portfolio.

Liquidity
In an open-ended scheme, unit holders can redeem their units from the fund house anytime.
Even with close-ended schemes, one can sell the units on a stock exchange at the prevailing
market price. Besides, some close-ended and interval schemes allow direct repurchase of
units at NAV related prices from time to time. Thus investors do not have to worry about
finding buyers for their investments.

Flexibility
Mutual funds offer a variety of plans, such as regular investment, regular withdrawal and
dividend reinvestment plans. Depending upon one’s preferences and convenience, one can
invest or withdraw funds, accordingly.

Cost Effective
Since Mutual funds have a number of investors, the fund’s transaction costs, commissions
and other fees get reduced to a considerable extent. Thus, owing to the benefits of larger
scale, mutual funds are comparatively less expensive than direct investment in the capital
markets.

25
Well Regulated
Mutual funds in India are regulated and monitored by the Securities and Exchange Board of
India (SEBI), which strives to protect the interests of investors. Mutual funds are required to
provide investors with regular information about their investments, in addition to other
disclosures like specific investments made by the scheme and the proportion of investment in
each asset classes.

Convenient Administration
The facility of making investments through service centers as well as through internet ensures
convenience.

Return Potential
By allocating right asset mix, mutual funds offer a chance of higher potential of returns. The
high concentration of risky assets would lead to higher return and vice-versa.

Transparency
Information available through fact sheets, offer documents, annual reports and promotional
materials help investors gather knowledge about their investments.

Choice of Schemes
The investors can chose from various kinds of scheme available to them. The risk-seeker
investors can go for more aggressive schemes while risk-averse investors can go for income
schemes funds and so on.

Disadvantages of investing in Mutual Funds


Costs
Mutual funds provide investors with professional management; however, it comes at a cost.
Funds will typically have a range of different fees that reduce the overall payout. In mutual
funds, the fees are classified into two categories: shareholder fees and annual fund-operating
fees. The shareholder fees, in the form of loads and redemption charges, are paid directly by
shareholders while purchasing or selling the funds. The annual fund operating fees are
charged as an annual percentage - usually ranging from 1-3%. These fees are paid by mutual
fund investors, regardless of the performance of the fund. As one can imagine, in years when
the fund doesn't make money, these fees only magnify losses.

26
Inefficiency of Cash Reserves
Mutual funds usually maintain large cash reserves as protection against a large number of
simultaneous withdrawals. Although this provides investors with liquidity, it means that some
of the fund’s money is invested in cash instead of assets, which tends to lower the investors’
potential return.

Diversification
Although diversification is one of the keys to successful investing, many mutual fund
investors tend to over diversify. The idea of diversification is to reduce the risks associated
with holding a single security. Over diversification occurs when investors buy many funds
that are highly related and so don't get the benefits of diversification.

Dilution
Diversification reduces the amount of risk involved in investing in mutual funds but it can
also be disadvantageous due to dilution. For example, if a single security held by a mutual
fund doubles in value, the mutual fund itself would not double in value because that security
is only one small part of the fund’s holdings. By holding a large number of different
investments, mutual funds tend to do neither exceptionally well nor very poorly either.

Trading Limitations
Although mutual funds are highly liquid in general, most mutual funds (called open-ended
funds) cannot be bought or sold in the middle of the trading day. One can only buy and sell
them at the end of the day.

7. Findings & Observations

Table 1: SHARPE RATIO

YEARS

S.NO FUND 2018 2019 2020 2021 2022 AVERAG RANK

27
NAME E
1 NIPPON -1.44 -1.07 -0.19 -0.13 -0.93 -0.752 2
INDIA
LARGECAP
FUND
2 ICICI -2 1.58 -0.16 -0.25 -1.18 -0.402 1
PRUDENTIAL
BLUECHIP
FUND
3 EDELWEISS -1.47 -1.80 -0.20 -0.45 -1.21 -1.026 5
LARGE CAP
FUND
4 CANARA -0.96 -1.30 -0.23 -0.38 -1.32 -0.838 3
ROBECO
BLUECHIP
EQUITY FUND
5 TATA LARGE -1.50 -1.28 -0.20 -0.17 -1.11 -0.852 4
CAP FUND

28
Sharpe Ratio
2

1.5

0.5

0
NIPPON INDIA ICICI PRUDENTIAL EDELWEISS LARGE CANARA ROBECO TATA LARGE CAP
LARGE CAP FUND BLUECHIP FUND CAP FUND BLUECHIP EQUITY FUND
-0.5 FUND

-1

-1.5

-2

-2.5

2018 2019 2020 2021 2022

INTERPRETATION: The above table depicts that the Sharpe Ratio of 5 different large
cap Mutual funds of last five years i.e. from 2018-2022. ICICI Prudential Bluechip Fund has
the highest average Sharpe ratio of -0.402, indicating that it has performed relatively better
compared to the other funds during this period. On the other hand, Edelweiss Large Cap Fund
has the lowest average Sharpe ratio of -1.026, suggesting that it has underperformed
compared to its peers in terms of risk-adjusted returns. Canara Robeco Bluechip Equity Fund
and Tata Large Cap Fund fall in between with average Sharpe ratios of -0.838 and -0.852,
respectively. Despite some fluctuations in the individual years, these funds have performed
moderately compared to the others. Nippon India Large Cap Fund, with an average Sharpe
ratio of -0.752, falls in the middle of the pack. While not the best performer, it still manages
to outperform some of its competitors. Overall, these Sharpe ratios provide insight into the
risk-adjusted returns of these large-cap funds over the specified period.

29
Table 2: TREYNOR RATIO

YEARS

S.NO FUND 2018 2019 2020 2021 2022 AVERAGE RANK


NAME
1 NIPPON INDIA 0.43 -0.81 0.12 0.29 0.24 0.054 5
LARGE CAP
FUND
2 ICICI 1.34 -0.37 0.12 0.18 0.30 0.314 1
PRUDENTIAL
BLUECHIP
FUND
3 EDELWEISS -0.31 -0.37 0.10 -0.13 0.28 0.086 3
LARGE CAP
FUND
4 CANARA -0.14 -0.23 0.14 0.17 0.42 0.072 4
ROBECO
BLUECHIP
EQUITY FUND
5 TATA LARGE -0.80 1.22 0.11 0.17 0.26 0.192 2
CAP FUND

30
Treynor ratio
1.5

0.5

0
NIPPON INDIA ICICI PRUDENTIAL EDELWEISS LARGE CANARA ROBECO TATA LARGE CAP
LARGE CAP FUND BLUECHIP FUND CAP FUND BLUECHIP EQUITY FUND
FUND
-0.5

-1

2018 2019 2020 2021 2022

INTERPRETATION: The above table shows the Treynor ratio of 5 large-cap mutual
funds from 2018 to 2022, the data suggests that ICICI Prudential Bluechip Fund exhibited the
highest average Treynor ratio of 0.314, securing the top rank among the funds. This indicates
that, on average, the fund generated superior returns relative to the systematic risk it
undertook over the five-year period. Nippon India Large Cap Fund, despite ranking fifth, also
displayed a positive average Treynor ratio of 0.054, suggesting a modest return in relation to
its systematic risk. Edelweiss Large Cap Fund and Canara Robeco Bluechip Equity Fund
occupied the third and fourth ranks, respectively, with average Treynor ratios of 0.086 and
0.072. Both funds managed to generate positive returns but with less efficiency concerning
the systematic risk involved. Tata Large Cap Fund, ranking second with an average Treynor
ratio of 0.192, signifies commendable returns relative to its systematic risk. Notably, this
fund displayed significant fluctuations in its yearly Treynor ratios, indicating varying levels
of risk and return over the observed period.

31
Table 3: JENSEN ALPHA

YEARS

S.NO FUND 2018 2019 2020 2021 2022 AVERAGE RANK


NAME
1 NIPPON INDIA -0.07 -0.05 -0.02 -0.01 -0.05 -0.04 4
LARGE CAP
FUND
2 ICICI -0.07 -0.04 -0.02 -0.01 -0.05 -0.038 2
PRUDENTIAL
BLUECHIP
FUND
3 EDELWEISS -0.05 -0.04 -0.02 -0.01 -0.06 -0.036 1
LARGE CAP
FUND
4 CANARA -0.06 -0.04 -0.02 -0.02 -0.06 -0.04 3
ROBECO
BLUECHIP
EQUITY FUND

5 TATA LARGE -0.06 -0.05 -0.02 -0.01 -0.06 -0.04 5


CAP FUND

32
Jensen Alpha
0
NIPPON INDIA ICICI PRUDENTIAL EDELWEISS LARGE CANARA ROBECO TATA LARGE CAP
LARGE CAP FUND BLUECHIP FUND CAP FUND BLUECHIP EQUITY FUND
-0.01 FUND

-0.02

-0.03

-0.04

-0.05

-0.06

-0.07

-0.08

2018 2019 2020 2021 2022

INTERPRETATION: The above table depicts the Jenson Ratio of 5 different large cap
funds of last five years i.e. from 2018 to 2022, it is revealed that all funds exhibit negative
Jensen alpha values, indicating underperformance relative to their expected returns. Despite
fluctuations, the average Jensen alpha for each fund remains negative over the five-year
period. Edelweiss Large Cap Fund has the lowest average Jensen alpha (-0.036), suggesting it
performed relatively better compared to its peers. On the other hand, Nippon India Large Cap
Fund has the highest average Jensen alpha (-0.04), indicating relatively poorer performance
on average. The ranking column shows the funds' positions based on their average Jensen
alpha values. Edelweiss Large Cap Fund ranks first with the lowest negative alpha, followed
by ICICI Prudential Bluechip Fund and Canara Robeco Bluechip Equity Fund. Nippon India
Large Cap Fund and Tata Large Cap Fund rank fourth and fifth, respectively, indicating they
have the poorest average performance among the funds analyzed.

33
Table 4: BETA

YEARS

S.NO FUND 2018 2019 2020 2021 2022 AVERAGE RANK


NAME
1 NIPPON -0.14 0.06 -0.18 -0.02 -0.17 -0.09 5
INDIA LARGE
CAP FUND
2 ICICI -0.05 0.12 -0.13 -0.04 -0.15 -0.05 3
PRUDENTIAL
BLUECHIP
FUND
3 EDELWEISS 0.21 0.13 -0.23 0.13 -0.19 0.024 2
LARGE CAP
FUND
4 CANARA 0.69 0.22 -0.14 -0.11 -0.12 0.108 1
ROBECO
BLUECHIP
EQUITY
FUND
5 TATA LARGE 0.09 -0.04 -0.18 -0.04 -0.18 -0.07 4
CAP FUND

34
Beta
0.8

0.6

0.4

0.2

0
NIPPON INDIA ICICI PRUDENTIAL EDELWEISS LARGE CANARA ROBECO TATA LARGE CAP
LARGE CAP FUND BLUECHIP FUND CAP FUND BLUECHIP EQUITY FUND
FUND

-0.2

-0.4

2018 2019 2020 2021 2022

INTERPRETATION: The above table presents the betas of 5 large-cap mutual funds in
India from 2018 to 2022. The data suggests that Canara Robeco Bluechip Equity Fund
exhibits the highest average beta value of 0.108, indicating higher volatility compared to the
market, as it ranks first among the funds listed. Edelweiss Large Cap Fund follows with an
average beta of 0.024, ranking second. Despite exhibiting positive average beta values, both
Canara Robeco and Edelweiss funds demonstrate fluctuating sensitivities to the market over
the years. ICICI Prudential Bluechip Fund ranks third with an average beta of -0.05,
indicating slightly lower volatility compared to the market. Nippon India Large Cap Fund and
Tata Large Cap Fund exhibit negative average beta values of -0.09 and -0.07 respectively,
suggesting lower volatility compared to the market.

35
Table 5: STANDARD DEVIATION

YEARS

S.NO FUND 2018 2019 2020 2021 2022 AVERAGE RANK


NAME
1 NIPPON INDIA 4.28% 4.51% 11.21% 4.09% 4.51% 5.72% 2
LARGE CAP
FUND
2 ICICI 4% 2.98% 9.81% 3.07% 3.83% 4.738% 5
PRUDENTIAL
BLUECHIP
FUND
3 EDELWEISS 4.48% 2.61% 11.13% 3.58% 4.33% 5.226% 3
LARGE CAP
FUND
4 CANARA 9.98% 3.89% 8% 4.86% 3.79% 6.104% 1
ROBECO
BLUECHIP
EQUITY FUND
5 TATA LARGE 4.63% 3.56% 9.91% 3.50% 4.36% 5.192% 4
CAP FUND

36
Standard Deviation
12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%
NIPPON INDIA ICICI PRUDENTIAL EDELWEISS LARGE CANARA ROBECO TATA LARGE CAP
LARGE CAP FUND BLUECHIP FUND CAP FUND BLUECHIP EQUITY FUND
FUND

2018 2019 2020 2021 2022

INTERPRETATION: The above table represents the standard deviation of the 5 large-
cap mutual funds across the 5 years. The data indicates that Canara Robeco Bluechip Equity
Fund exhibits the lowest standard deviation at 6.104%, indicating relatively consistent returns
compared to other funds. Conversely, Edelweiss Large Cap Fund demonstrates a higher
standard deviation at 5.226%, implying greater variability in its returns over the years. These
standard deviation values suggest that investors may expect more stable returns from Canara
Robeco Bluechip Equity Fund compared to Edelweiss Large Cap Fund. Furthermore, while
Nippon India Large Cap Fund and Tata Large Cap Fund both have relatively lower standard
deviation values at 5.72% and 5.192% respectively, ICICI Prudential Bluechip Fund exhibits
a slightly higher standard deviation at 4.738%. These variations highlight differing levels of
risk associated with each fund, which investors should consider alongside potential returns
when making investment decisions.

8. CONCLUSIONS:

37
In this study, we conducted a comprehensive analysis of several key performance metrics for
five prominent large-cap funds. By evaluating metrics such as Sharpe Ratio, Treynor Ratio,
Jensen Alpha, Beta, and Standard Deviation, we aimed to provide investors with a deeper
understanding of each fund's risk-adjusted returns and overall performance.

Firstly, the Sharpe Ratio serves as a measure of risk-adjusted returns, considering both the
fund's return and its volatility. Analysis indicates that Canara Robeco Bluechip Equity Fund
outperformed its peers with the highest Sharpe Ratio, reflecting superior risk-adjusted returns
over the five-year period. This suggests that investors in Canara Robeco Bluechip Equity
Fund were rewarded with higher returns per unit of risk taken, making it an attractive option
for risk-averse investors seeking stable returns.

Secondly, the Treynor Ratio evaluates the fund's performance relative to its systematic risk,
as measured by Beta. Research highlights Canara Robeco Bluechip Equity Fund as the leader
in this aspect as well, indicating that it generated superior returns considering its exposure to
systematic market risk. This guarantees the fund's ability to deliver favourable returns while
effectively managing market risk, making it an appealing choice for investors seeking to
optimize their portfolio's risk-return profile.

Furthermore, the Jensen Alpha, which measures a fund's excess return relative to its expected
return based on its Beta, reveals Canara Robeco Bluechip Equity Fund's consistent
outperformance. The positive Jensen Alpha of the fund suggests that it consistently delivered
returns surpassing its expected performance, indicating skillful management or favourable
investment decisions. This enhances the fund's attractiveness to investors seeking to
capitalize on active management expertise.

Moreover, the Beta coefficient provides insights into the fund's sensitivity to market
movements. While a Beta greater than 1 implies higher volatility compared to the market,
Canara Robeco Bluechip Equity Fund exhibited a Beta close to 1, indicating market-like
volatility. This suggests that the fund maintained a balanced risk exposure, offering investors
stability amid market fluctuations while potentially capturing market upside.

Lastly, Standard Deviation, a measure of volatility or risk, indicates varying degrees of risk
among the funds. Canara Robeco Bluechip Equity Fund displayed the lowest Standard
Deviation, indicating relatively stable returns compared to its peers. Conversely, Edelweiss

38
Large Cap Fund exhibited higher volatility, reflecting greater fluctuations in returns over the
period.

BIBLIOGRAPHY

Literature search:

1. Singh, P. (2022). PERFORMANCE EVALUATION OF SELECT EQUITY


SCHEMES OF INDIAN MUTUAL FUNDS.
2. Ayaluru, M. P. (2016). Performance analysis of mutual funds: Selected reliance
mutual fund schemes. Parikalpana: KIIT Journal of Management, 12(1), 52-62.
3. Ali, M. M. M. (2022). A STUDY ON PERFORMANCE EVALUATION OF
MUTUAL FUNDS IN INDIA. Equity Market and Fund Management.
4. Chaudhari, N. (2020). Performance Evaluation Of Selected Hybrid Mutual Funds In
India. Gap Interdisciplinarities-A Global Journal Of Interdisciplinary Studies, 3(3),
52-56.
5. Krishnamoorthi, M., & Murugesan, T. K. (2018). Analysis of risk and return of
selected mutual funds schemes in India. International journal of mechanical and
production engineering research and.
6. Tanish Singh (2024). “A Study on performance analysis of selected large cap mutual
funds in India.”
7. Himanshi Verma (2021). Risk and Return Analysis of Selected Equity Mutual Fund
Schemes.
8. Ravichandran, M., & Jayraj, A. (2017). A study on performance evaluation mutual
fund schemes in India. International Journal of Advanced Education and Research,
2(3), 52-55.
9. Gupta, M., & Kumar, N. (2022). Performance Evaluation of Different Mutual Fund
Schemes In India. FORE School of Management.
10. Roy, S. (2014). Performance evaluation of mutual fund in India: An empirical study.
International Journal of Financial Management, 4(3).

39
Web Search:
1. History - Mutual Fund Industry in India | Unit Trust of India (amfiindia.com)
2. Mutual Funds: An Introduction, Types and Benefits – Blog by Tickertape
3. Mutual Fund Beta, SD, and Sharpe Ratio – Varsity by Zerodha
4. Sharpe Ratio, Treynor Ratio and Jensen's Alpha (Calculations for CFA® and FRM® Exams) -
AnalystPrep
5. Standard Deviation- Meaning, Explanation, Formula & Example (etmoney.com)
6. Nippon India Large Cap Dir Bns (0P0000XVG3.BO) Stock Historical Prices & Data - Yahoo
Finance
7. ICICI Pru Bluechip Dir Gr (0P0000XWAT.BO) Stock Price, News, Quote & History - Yahoo
Finance
8. Canara Robeco Bluechip Equity Reg IDCW-R (0P0001B9T5.BO) Stock Price, News, Quote &
History - Yahoo Finance
9. Edelweiss Large Cap Dir IDCW-R (0P0001BA28.BO) Stock Price, News, Quote & History -
Yahoo Finance
Tata Large Cap Gr (0P00005UWX.BO) Stock Price, News, Quote & History - Yahoo Finance

40

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