HEDGING TECHNIQUES IN MUTUAL FUNDS
Since the objective is to analyze the effectives of hedging in mutual funds, the datarequired is the fact sheet of the mutual fund for the relevant period. Further, from the usewebsite, the relevant details of derivatives contract were captured.
There was one method for the data collection:
Secondary DataThe mechanism involved in secondary data collection, mainly browsing through adequate journal (related to mutual funds and derivatives), collection of fact sheet of the mutualfund from the AMC, web portals, & books etc.Quantitative analysis required ascertaining the returns of the mutual funds for the certain period and then for same period calculated the hedged returns. Thus, compared both thereturns to arrive at better results.
Mutual Funds: This study uses the daily returns of mutual funds such as FranklinBluechip Fund, Franklin Infotech Fund and Franklin Prima fund. The entire funds takenare growth funds. Daily NAV data was obtained from Association of Mutual Funds inIndia and computed daily returns from this data. After this, I used Chi-Square test to check that Is the Mutual Funds returns are equal tohedging returns or not ? By this I come to know how hedging returns are reduced the risk and also comparison of before and after hedging returns.Lovely Professional University33