Thursday, September 25, 2014
Chauhan & Gautam on Mutual Funds
Tarini Chauhan and Jayant Gautam have posted An Analysis of Performance of Mutual Funds: Public Sector vs Private Sector on SSRN with the following abstract:
A mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with their objectives. Investors need to know how risky individual assets are and what their contribution to the total risk of a portfolio would be. Plenty of Mutual Funds are available where the investors can put their money. Before investing they want to know which fund gives more return, which fund is performing well, which fund is more risky etc. In this study the performance evaluation of balanced mutual funds scheme is carried out through risk adjusted performance measure by Sharpe’s, Treynor’s, Jensen’s Index which will ultimately help investors to choose the best mutual fund generating maximum return with minimum risk. Risk and return can be analyzed by finding out Average Return, Standard Deviation and Beta. The data used is monthly closing NAV recorded in the period starting from 1st April 2011 to 31st March 2012. Single year has been taken in the present times; it is tough to take any year as a normal year. The study reveals that private sector has performed better as compared to its counterpart in case of average return, standard deviation and beta. The risk-adjusted performance measures depicted poor performance of the sample schemes but public sector was preferred in this regard.