Evaluation of Operating Efficiency of Designated Indian Mutual Funds: A Performance Review

Abstract

In the recent competitive environment, that is after liberalization, privatization and globalization various investment avenues are available for an investor to invest their money and to get a sufficient return to make a comparison of risk-return measurement. In comparison to traditional schemes like bank FD or various types of deposit schemes opened in a bank or any other financial instruments traded in the money market, the capital market is now indulging the fostering growth in this area. Out of the major schemes in the capital market, a mutual fund is best for an apprentice. It can ensure for the beginners to increase return on investment with minimized risk in comparison to traditional investment.

There is a wide scope of operations in mutual fund investment to diversify their analysis of performance according to an investor’s discretion of investment. However one can analyse the effectiveness of various funds traded in the Indian capital market before making an investment. In this paper, we have selected some mutual funds schemes traded in the Indian capital market according to the CRISIL ranking and also made an attempt to evaluate their performance based on some parameters like AUM, NAV & risk analysis (by using different portfolio performance indexes). We have taken some specified categories of fund options, of which the risk-return analysis has been statistically tested with the Single Factor ANOVA test. The result obtained from such a test may be very effective for an investor to consider the investment alternatives.