Interna tional Jo urna l o f Applied Research 2019 ; 5 (1 2 ): 407 -4 12

ISSN Print: 2394-7500

ISSN Online: 2394-5869
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A comparative study on the performance of mutual
IJAR 2019; 5(12): 407-412
www.allresearchjournal.com
fund schemes
Received: 16-10-2019
Accepted: 27-11-2019
Gollapati Kanaka Durga and Dr. P Ammani
Gollapati Kanaka Durga
Research Scholar, Department Abstract
of Business Administration, Mutual funds are a daunting concept in the Indian sense. The financial situation of India has hit
Career Point University, Kota, commanding heights. Mutual funds are basically investment instruments in which persons with
Rajasthan, India common investment target pool their capital and spend correspondingly. The need and reach for mutual
fund operations has significantly improved with focus on growing national savings and increasing
Dr. P Ammani investment distribution across markets. Since its establishment in 1963, the Indian mutual fund industry
Research Supervisor, Career has come a long way. In all parameters, industry has seen enough growth; number of fund houses,
Point University, Kota, number of schemes, mobilization of funds, management of assets etc. Alongside different financial
Rajasthan, India goods, the mutual fund provides investors with optimum returns and low risks. Creation in the Indian
capital market of different mutual funds schemes has proven to be one of the most catalytic forms of
investing to generate substantial investment growth. Asset management firms take a strong role in the
financial stability and inspire investors' buying activities.

Keywords: Comparative, performance, schemes, everybody

Introduction
Nobody knows the future, but everybody needs to be protected from future unknown
occurrences. Future is dangerous. The secret to the lives of all human beings is financial
stability. Investment is planned to distribute capital in the future to some gain. Save is an
excess of revenue over spending which is referred to as investment if those savings are spent
to produce more income. Cattle, soil and precious metals are typical choices for investment.
Mutual fund has been the foremost favored investment choice for the small investors since its
rise. The foremost purpose for this can be the high investor’s return and less risk level. It
offers a chance for the small investors to participate within the market securities and
therefore serving to them in increasing their business thus reducing the risk. Hence the study
of mutual fund has been equally necessary in today’s situation because it is tending to
possess genuine.
The economic competitiveness of the mutual funds market has opened new opportunities for
interested investors and provided the Indian financial sector with much required liquidity. “In
the jungle of the financial services market in India, investors cannot identify the
benchmarking companies and pick them. Mutual funds have several common kinds, such as
capital funds, bond funds, balance funds, development funds, revenue funds, tax saving
funds, nation funds, index funds, exchange traded funds, industry funds, etc.

Corresponding Author:
Gollapati Kanaka Durga
Research Scholar, Department
of Business Administration,
Career Point University, Kota,
Rajasthan, India
Fig 1: Mutual funds working
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Mutual Funds can be categorized according to their nature stock, has led to more investment in mutual funds being
as below: attracted.
Nimalathasan, D. R. B., & Gandhi, M. R. K. (2012) [1]. A
Debt funds comparable analysis of equity diversification and mid-cap
Debt mutual fund is a form of mutual fund intended structures and the findings revealed that Canara Robeco
particularly for low-risk investors whose primary goal is to Equity was preferred to the maximum amongst Open
appreciate capital and to achieve decent returns. Capital Builders, while HDFC Capital Builders was
preferred among the secret mid-cap schemes, at the same
time among the highest of those who were the top.
Balanced funds
J.S. Yadav and O.S. Yadav (2012) [2]. Indian Finance
As the name suggests, all equity and debt funds are
Journal, Vol. 6 No. 9, In their review of the comparison
combined. They invest in both shares and securities of fixed between mutual funds and foreign institutional investors, it
income which conform to the scheme's predefined was observed that while India is a desirable investor-
investment objective. The share of equity gives prosperity destination for Foreign Institutional Investors, investment
and the share of debt gives rates of stabilisation. made by mutual funds was greater than investment under
FIIs during the Indian Stock Market: A Comparative
Equity funds Review of Mutual Funds and Foreign Institutional Investors.
Investments pooled in the stocks of public corporations of Ravi Vyas and Suresh Chandra Moonat (2012) [3]. Indian
share investment funds. Investment decision making for Finance Journal, Vol. 6 No 8, Mutual Funds Investors'
their funds, mutual fund managers adopt various models for perception and actions in Madhya Pradesh concluded that
bond selection. Which portfolio managers use an inventory highly volatile funds are unstable and hence, before making
worth strategy to check for inventories that are overlooked the investments, the fund manager should collect all
in comparison to other firms? possible details.” Investors can deliberately and fairly
As an investment institution, mutual funds provide the diversify investment in mutual funds to balance the
investors with financial resources and financial products and investment risk. And he proposed that investors should
continue to improve the financial markets. The importance induce a daily saving activity to render the tiny savings a
of mutual funds to the growth and advancement of capital major benefit.
markets explicitly and indirectly cannot be compromised for
the economic growth. Research methodology
In the research, the report is informative. In analysis there is
Review of literature a contrast between the numerous open-ended mutual fund
Agarwal and Gupta (2011)The study on mutual funds was schemes, and the average output of the different mutual
limited to just a few emerging markets, with the USA still funds schemes is often evaluated. “The performance of the
having particular focus, even as the Global Mutual Fund chosen mutual funds schemes under this analysis will be
industry continued to expand in spring and fall. While measured using various statistical and financial methods.
emerging markets like India have attracted investment Sample comprises of 20 open fund reciprocal schemes
interest around the globe, they remain unresolved, especially (taking two schemes from each AMC chosen) over five
in the field of mutual funds, from much systematic study. years selected for research purposes. Different metrics,
Their research aimed to track the efficiency of mutual fund including return, gamma, standard deviation, correlation,
operations in India in an attempt to bridge the difference. In regression analysis and risk-adjusted performance measures,
this respect, all equity-diversified mutual funds were such as Sharpe, Treynor and Jensen, are also used in the
checked on their quarterly return results during the span of assessment of mutual fund performance schemes in this
January 2002 to December 2006.” The CAPM and Fama report.
French models were examined. The study called for more Systematic vulnerability tests beta. Beta demonstrates how
analysis and insight in the relationship between the stock rates respond to the powers of the economy. Beta shall
determining factors in portfolios' success and their impact be determined by comparing the protection return to the
on mutual returns on funds among conflicting results from business return. The industry would have beta 1.0 by
the implementation of these two models. convention. It can be claimed that the mutual fund is static,
Debasish, Sathya Swaroop (2009) [5]. “A major part of the volatile or dynamic. The stock is said to be more expensive
decision-making on investment was the risk-return than the index if the beta approaches 1. The meaning that
partnership. While studies explored the essence of the stock is less volatile relative to the market is if the beta
connections between risks and returns, the proof of these is smaller than 1. If beta is null, the probability is similar to
interactions was not satisfactory. The analysis showed that that of the sector. Bad beta is quite unusual. A relative
both uncertainty and variance were deemed risk measure of the protection sensitivity rates is to adjust the
replacements by fund managers. For calculation parameters, overall stock index return.
sample funds had the same risk efficiency, but the
performance heterogeneity of fund characteristics was Beta calculation
found. The findings indicate a good favourable association
with 35% of high-risk portfolios and 15% of low-risk NΣXY – ΣXΣY
portfolios. β = NΣX2 – (Σ X)2
Agarwal (2011) The Indian Mutual Fund Industry evaluated
and suggested that the mutual funds industries in India have Where N = No of observations
been rising unbelievably with major domestic and
international investors drawing investment. A big increase ΣY = Sum of Y returns (Here Y is a particular fund return)
in the amount of AMCs that provide investors sufficient ΣX = Sum of X returns (Here X is market return)
opportunity in the form of stability, hedging, arbitration and ΣXY = Sum of X ∗ Y
limited risk with better returns than any other long-term X2 = X ∗ X

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Analysis and Interpretations

Table 1: Risk, standard deviation and return of open-ended mutual fund schemes
Schemes Beta Average daily returns Standard deviation
HDFC Capital Builder Fund - Growth Option 0.114 0.06 0.88
HDFC Medium Term Opportunities Fund - Growth Option 0.002 0.03 0.26
ICICI Prudential Corporate Bond Fund - Regular Plan - Growth 0.001 0.03 0.12
ICICI Prudential Mid Cap Fund - Regular Plan - Growth 0.115 0.07 0.93
Reliance Dynamic Bond Fund-Growth Plan-Growth Option 0.004 0.03 0.25
Reliance Income Fund - Growth Plan Growth Option 0.004 0.03 0.25
Birla Sun Life Income Plus - Growth - Regular Plan -0.001 0.03 0.24
Birla Sun Life Dynamic Bond Fund - Growth - Regular Plan 0.009 0.04 0.12
UTI - Equity Fund-Growth Option 0.141 0.06 0.90
UTI Opportunities Fund-Growth Option 0.133 0.06 0.89
SBI Blue Chip Fund-Regular Plan Growth -0.04 0.05 0.93
SBI Corporate Bond Fund - Regular Plan 0.007 0.04 0.03
Franklin India Income Opportunities Fund – Growth 0.006 0.04 0.09
Franklin India Savings Plus Fund - Growth Option 0.001 0.03 0.01
IDFC-Money Manager Fund- Regular Plan-Growth 0.008 0.03 0.05
IDFC Dynamic Bond Fund - Growth 0.002 0.04 0.23
Kotak Equity Arbitrage Fund - Growth 0.003 0.03 0.04
Kotak Flexi-Debt - Regular Plan - Growth 0.001 0.03 0.09
DSP Black Rock Income Opportunities Fund - Regular Plan –Growth 0.002 0.03 0.06
DSP Black Rock MIP Fund- Regular Plan – Growth 0.007 0.04 0.24
Market 1.000 0.04 1.064
Average - 0.041 0.329

Beta ICICI Savings plus Fund, IDFC Wealth Manager, Kotak

As beta is below 1, the fund responds less than the response Flexi Debt Fund and DSP Black Rock MIP fund.
of the stock. The beta of all funds is less than 1, indicating a
lower protection price than the sector. Standard deviation: Higher default implies more chance.
Franklin India savings plus fund (0.01%), IDFC wealth
Return management fund (0.05%), ICICI Prudential Corporate
The table above reveals that, in terms of highest returns bond fund (0.12%), “IDFC Dynamic bond fund (0.23%),
(0.07%) of the chosen mutual funds, ICICI Prudential mid- DSP Blackrock MIP fund (0.24%) and Birla Sun life bond
cap Fund development has done well. The next best returns fund development are less expensive in terms of other
are the UTI Opportunities Fund (0.06 percent), and the SBI securities, as their returns are less unpredictable. Prudential
Chip Fund, respectively (0.05 percent), respectively. The mid-cap fund growth (0.93 percent), the SBI Blue Chip
ICICI Prudential Corporate Bond Fund, Revenue Fund, DSP Fund (0.93 percent), UTI-Equity Fund-Growth Choice (0.90
Black Rock MIP Fund and DSP Income Opportunity Fund percent) and the UTI Opportunities Fund-Growth Option
have lowest income (0.03 per cent)” among the entire fund; (0.89 percent) offer the maximum volatility of the whole
fund.

Table 2: Correlation analysis of selected mutual fund schemes

Schemes: MF NSE MID CAP Nifty NSE JUNIOR NSE 200 BSE S&P BSE Small cap
Birla Sun Life Dynamic Bond 0.199 0.167 0.202 0.179 0.18 0.182
Birla Income Plus 0.167 0.16 0.177 0.169 0.166 0.129
DSP MIP FUND 0.579 0.735 0.571 0.56 0.569 0.554
DSP Block Rock 0.129 0.179 0.127 0.099 0.103 0.124
Franklin income opportunities 0.119 0.165 0.117 0.081 0.087 0.118
Franklin saving scheme 0.099 0.128 0.102 0.064 0.125 0.125
HDFC income fund 0.163 0.154 0.164 0.164 0.071 0.067
HDFC Capital Builder 0.884 0.931 0.853 0.949 0.9 0.72
ICICI Mid Cap Fund 0.895 0.733 0.835 0.796 0.778 0.82
ICICI Corporate Bond 0.176 0.164 0.087 0.178 0.074 0.079
IDFC Monthly Return 0.173 0.142 0.067 0.148 0.056 0.08
IDFC Dynamic Bond fund 0.15 0.143 0.159 0.155 0.151 0.114
Kotak Flexi fund 0.186 0.14 0.111 0.154 0.101 0.121
Kotak Equity Arbitrage Fund -0.294 -0.339 -0.269 -0.334 -0.299 -0.171
Reliance Income Fund 0.163 0.161 0.108 0.169 0.092 0.096
Reliance Dynamic Bond Fund 0.17 0.165 0.119 0.175 0.105 0.11
SBI Corporate Bond 0.167 0.101 0.167 0.133 0.144 0.189
SBI Blue Chip Fund 0.874 0.964 0.882 4 0.972 0.973 0.778
UTI Opportunities fund 0.865 0.959 0.838 0.965 0.916 0.709
UTI Equity fund Growth 0.891 0.972 0.857 0.982 0.931 0.729

As seen above, the mutual fund schemes have a positive and the Nifty funds (-34%), led by NSE 200 (-33.4%), BSE
correlation to selected market indexes represented by r. Midcap (-29.4%), BSE Midcap (-17.1%), S&P BSE-29.9%)
Similarly, the partnerships between the Kotak Subjective (and NSE Junior (-26.9%) have been adversely influenced.
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Table 3: Impact of mutual fund schemes on selected market indices

Un standardized coefficients Std. coef.
Independent variable Dependent variable
Std. error B Beta t Sig.
Nifty DSP Block Rock 0.003 0.016 0.280 6.100 0.000
NSE Junior Birla Sun Life Dynamic Bond 0.013 0.025 0.232 1.994 0.046
BSE Small cap Franklin Savings Scheme 0.002 0.005 0.154 2.160 0.031
NSE MID CAP 0.016 0.066 0.306 4.207 0.000
NSE Junior DSP MIP Fund 0.014 0.036 0.172 2.512 0.012
Nifty 0.007 0.175 0.792 26.203 0.000
NSE MID CAP 0.031 0.182 0.228 5.906 0.000
NSE 200 HDFC Capital Builder 0.114 0.288 0.344 2.527 0.012
Nifty 0.094 0.302 0.369 3.218 0.001
Nifty Franklin income opportunities 0.004 0.022 0.258 5.960 0.000
NSE MID CAP IDFC Monthly Return 0.004 0.012 0.255 3.383 0.001
NSE 200 0.164 0.411 0.461 2.503 0.012
NSE MID CAP 0.044 0.502 0.589 11.319 0.000
ICICI Mifd Cap Fund
BSE S&P 0.056 -0.278 -0.301 -4.942 0.000
BSE Small cap 0.024 0.31 0.374 12.657 0.000
NSE MID CAP Kotak flexi Fund 0.003 0.010 0.233 3.030 0.002
BSE Small cap 0.005 0.020 0.259 3.903 0.000
Nifty Kotak Equity Arbitrage Fund 0.028 -0.054 -0.672 -1.931 0.054
NSE MID CAP 0.009 -0.030 -0.391 -3.339 0.001
BSE Small cap SBI Corporate Bond 0.001 0.002 0.164 2.297 0.022
Nifty SBI Blue Chip Fund 0.246 0.9210 0.332 3.739 0.000
NSE 200 0.029 0.062 0.241 2.158 0.031
Nifty UTI Opportunities Fund 0.203 1.298 0.6 6.399 0.000
NSE MID CAP 0.008 0.028 0.113 3.515 0.000
NSE 200 0.017 0.084 0.398 5.041 0.000
Nifty UTI Equity Fund 0.118 0.773 0.433 6.527 0.000
NSE MID CAP 0.005 0.034 0.171 7.508 0.000

The table above reveals that 92.1% in a 1% NIFTY rises in Kotak equity arbitration fund and the IDFC cash manager
SBI blue chip fund led by an HDFC capital-building fund fund were unsatisfactory.
with a rise of 77.3% (30.2%), a DSP MIP fund with an
increase of 11.0% (17.5%), a UTI opportunities fund with a Conclusion
development of 13%, a Franklin income opportunities fund In this review, 20 open ended mutual funds schemes were
(2.2%), a DSP Rock Fund with an extra 1,6%) and a evaluated between January 2015 and December 2019. The
Franklin investment scheme (0,7% of Franklin savings efficiency and return of these systems is evaluated. In this
funds). It was also observed that Kotak Equity Arbitration study, many risks are optimised for results. During the study
Fund will decline by 5.4 percent with every 1 percent raise time, all the schemes have been successful. The highest
in the nifty. return has come from ICICI Prudentia Mid Cap Fund
Similarly, the HDFC Capital Building Fund (HCF), led by development. Both funds evaluated in the sample are less
the UTI equity fund (8.4%) and the UTI opportunities funds volatile than the sector in general in terms of standard
(6.2%), display a rise of 28.8% with each 1% increase of deviation. The beta value of all the schemes included in the
NSE 200. Accordingly, a 1% rise in NSE MID CAP has study was less than that showing all mutual funds to be less
been seen to raise by 50.2% in ICICI Midcap following risky and less unpredictable.
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