ANALYSIS OF MUTUAL FUND

SCHEMES PERFORMANCE
MD ASIF IMAM
(MBA/4534/09)
INTRODUCTION OF THE STUDY

 MUTUAL FUND

 EQUITY,OPEN ENDED AND GROWTH.

 ICICI PRUDENTIAL AS A BASE SCHEMES.

 EVALUATION FUND THROUGH TREYNOR’S RATIO,SHARPE

RATIO, BETA AND STANDARD DEVIATION.

INDIAN INFOLINE: A VIEW

VISION STATEMENT:
Our vision is to be the most respected company in the financial
services space.
HISTORY:
1995 by Mr. Nirmal Jain (Chairman and Managing Director) as
an independent business research and information provider .
SERVICES:
Equity research, equities and derivatives trading, commodities
trading, portfolio management services, mutual funds, life
insurance, fixed deposits, gov bonds and other small savings
instruments to loan products and investment banking
NETWORK:
2100 business locations (branches and sub-brokers) spread
across more than 450 cities
OBJECTIVES OF THE STUDY

 The present study focuses on the comparative analysis of

mutual funds schemes performance with help of Sharpe Ratio
& Treynor’s Ratio.
 To evaluate the schemes on the basis of risk and return by
calculating Beta, Standard Deviation & mean.
 To get the in depth knowledge of the performance evaluation
of mutual fund.
 To analyze the performance of various growth schemes of
mutual fund.
RESEARCH METHDOLOGY
TOOL USED TO ANALYSIS THE PERFORMANCE

 RISK ADJUSTED: TREYNOR’S RATIO &SHARPE RATIO.

 SENSITIVITY: BETA.
 RISK AND RETURN: STANDARD DEVIATION &MEAN.
 COST EFFECTIVE: EXPENSE RATIO

SOURCES OF DATA:

The data has been collected from the secondary sources i.e.

 FACT SHEETS
 ANNUAL REPORTS
 OFFER DOCUMENTS
ANALYSIS OF MUTUAL FUND SCHEMES

1) EQUITY ORIENTED FUND (TAX PLAN)

2) INDEX FUND
3) SECTORAL FUND
4) EQUITY DIVERSIFIED FUND
5) BALANCED FUND
EQUITY ORIENTED FUND (TAX PLAN)
INTERPRETATION
 BETA: ICICI Prudential Fund is least volatile followed by SBI
MAGNUM & RELIANCE Fund respectively. Now if market rise, ICICI
Prudential Fund will rise at lower rate than other fund, but if
market falls ICICI PRUDENTIAL Fund will fall at lower rate too.

 SHARPE RATIO: Sharpe Ratio shows smart portfolio’s composition.

ICICI PRUDENTIAL is having the highest Sharpe Ratio of 0.14,
followed by SBI Magnum Fund & Reliance Tax plan. Reliance Tax
plan is having the least at 0.06 which refers this fund as high returns
but with high risk.
 
 TREYNOR RATIO: Treynor ratio is a risk-adjusted measure of return
based on systematic risk. Greater the value of Treynor Ratio better
is the fund. Here again ICICI Prudential fund scores higher than
other funds.
FINDINGS

 ICICI prudential tax plan is the best fund in terms of risk

adjusted returns.
 ICICI prudential tax plan has given the maximum return
(40.40) SBI Magnum tax plan has given the minimum return
for the period (28.44).
 ICICI prudential tax plan has been associated with maximum
risk (27.80) SBI Magnum tax plan has been associated with
minimum risk (16.36).
 ICICI prudential tax plan is the least price sensitive to market
fluctuations having lowest BETA of (0.84).
INDEX FUND
INTERPRETATION

 BETA: ICICI Prudential Index Fund & BIRLA Sun life Index Fund are
most volatile. Now if market rise, ICICI Prudential Index Fund &
BIRLA Sun life Index Fund will rise at faster rate than other fund, but
if market falls ICICI Prudential& Index Fund & BIRLA Sun life Index
Fund will fall at faster rate too.

 Sharpe ratio: Sharpe Ratio shows smart portfolio’s composition.

TATA Index Fund & BIRLA Sun life Index Fund are having the highest
Sharpe Ratio of 0.09. ICICI Prudential Index Fund is having the least
at 0.06 which refers this fund as high returns but with high risk.

 TREYNOR RATIO: Treynor ratio is a risk-adjusted measure of return

based on systematic risk. Greater the value of Treynor Ratio better
is the fund. Here TATA Index fund scores higher than other funds.
FINDINGS

 TATA INDEX FUND is the best fund in terms of risk adjusted

returns.
 TATA INDEX FUND has given the maximum return (40.42),
ICICI PRUDENTIAL INDEX FUND has given the minimum return
(35.35).
 BIRLA SUNLIFE INDEX FUND has been associated with
maximum risk (29.80), TATA INDEX FUND has been associated
with minimum risk (25.80).
 TATA INDEX FUND is the least price sensitive to market
fluctuations having BETA of (1.00).
SECTORAL FUND
INTERPRETATION

 BETA: TATA Pharma Fund is most volatile. Now if market rise, TATA
Pharma Fund will rise at faster rate than other fund, but if market
falls TATA Pharma Fund will fall at faster rate too.

 Sharpe ratio: Sharpe Ratio shows smart portfolio’s composition.

ICICI Prudential FMCG Fund has the highest Sharpe Ratio of 0.36.
TATA Pharma Fund is having the least at 0.30 which refers this fund
as high returns but with high risk.

 TREYNOR RATIO: Treynor ratio is a risk-adjusted measure of return

based on systematic risk. Greater the value of Treynor Ratio better
is the fund. Here ICICI Prudential FMCG fund scores higher than
other funds
FINDINGS

 ICICI PRUDENTIAL FMCG-GROWTH is the best fund in terms of

risk adjusted returns.
 RELIANCE PHARMA FUND has given the maximum return
(43.24), TATA PHARMA FUND has given the minimum return
(41.72).
 TATA PHARMA FUND has been associated with maximum risk
(30.26), ICICI PRUDENTIAL FMCG-GROWTH FUND has been
associated with minimum risk (28.70).
 ICICI PRUDENTIAL FMCG-GROWTH FUND is the least price
sensitive to market fluctuations having BETA of (0.93).
EQUITY DIVERSIFIED FUND
INTERPRETATION
 BETA:. ICICI Prudential Discovery Fund is least volatile. Now if
market rise ICICI Prudential Discovery Fund will rise at lower rate
than other fund, but if market falls ICICI Prudential Discovery Fund
will fall at lower rate too.

 Sharpe ratio: Sharpe Ratio shows smart portfolio’s composition.

ICICI Prudential Discovery Fund has the highest Sharpe Ratio of
1.44. Reliance Growth Fund is having the least at 1.29 which refers
this fund as high returns but with high risk.

 TREYNOR RATIO: Treynor ratio is a risk-adjusted measure of return

based on systematic risk. Greater the value of Treynor Ratio better
is the fund. Here Reliance Growth Fund scores higher than other
funds.
FINDING

 ICICI PRUDENTIAL DISCOVERY FUND is the best fund in terms of risk

adjusted return on the basis of Sharpe ratio & RELIANCE GROWTH
FUND is the best on the basis of Treynor ratio.
 BIRLA SUNLIFE DYNAMIC PLAN has given the maximum return
(42.24), ICICI PRUDENTIAL DISCOVERY FUND has given the
minimum return (38.19).
 RELIANCE GROWTH FUND has been associated with maximum risk
(27.54), ICICI PRUDENTIAL DISCOVERY FUND has been associated
with minimum risk (23.18).
 ICICI PRUDENTIAL DISCOVERY FUND is the least price sensitive.
BALANCED FUND
INTERPRETATION
 BETA: SBI Magnum balanced Fund is most volatile. Now if market
rise will rise at faster rate than other fund, but if market falls SBI
Magnum balanced Fund will fall at faster rate too.

 SHARPE RATIO: Sharpe Ratio shows smart portfolio’s composition.

SBI Magnum balanced Fund has the highest Sharpe Ratio of 1.44.
BIRLA Sunlife 95 is having the least at 0.09 which refers this fund as
high returns but with high risk.

 TREYNOR RATIO: Treynor ratio is a risk-adjusted measure of return

based on systematic risk. Greater the value of Treynor Ratio better
is the fund. Here ICICI Prudential Balanced Fund scores higher than
other funds.
FINDINGS

 SBI MAGNUM BALANCED FUND is the best fund in terms of

risk adjusted return on the basis of Sharpe ratio & ICICI
PRUDENTIAL BALANCED FUND is the best on the basis of
Treynor ratio.
 SBI MAGNUM BALANCED FUND has given the maximum
return (40.20), BIRLA SUNLIFE95 has given the minimum
return (20.29).
 SBI MAGNUM BALANCED FUND has been associated with
maximum risk (28.80), BIRLA SUNLIFE95 has been associated
with minimum risk (0.83).
 BIRLA SUNLIFE95 is the least price sensitive.
RECOMMENDATIONS
 In Tax plan the company should try to reduce its risk by
improving its standard deviation.
 The company should try to increase its returns in INDEX
Fund.
 The fund is more volatile & should reduce its Beta in INDEX
Fund.
 It needs to improve its risk adjusted returns by improving its
Sharpe ratio & Treynor ratio.
 In the discovery fund (Equity diversified) it should improve its
risk adjusted return by improving its Treynor ratio.
 The company needs to improve its returns.
 The company should provide more range of services to its
customer especially to the small time who want to invest
their earnings by the end of the day.
 The company should emphasize on advertising its schemes
and services.
 The company should expand its business by opening more
branches.
 Increase area of working by spreading awareness among
people about mutual fund. 
 Company should diversify their investment throughout the
different sector and avoid keeping majority funds only in a
particular sector.
LIMITATION OF THE STUDY

 The study includes time constraints

 The CRISIL rate may not be absolute standard in the industry
to evaluate the performance of equity fund.
 The chances of mathematical errors in the calculation cannot
be totally examined.
 The data used is secondary data and hence there is a chance
of making mistakes.
 Historical data - Past performance may or may not indicate
the future performance.
 Assumption made may or may not be correct.
THANK YOU